BOARD OF DIRECTORS PAUL E. BRAGDON, President, Reed College F. PAUL CARLSON, President, Oregon Graduate Center JAMES B. CASTLES, retired Vice President, Tektronix, hie. JOHN D. GRAY, Vice Cliairman, O,nark Industries, Inc. LEONARD LASTER, President, Oregon Health Sciences UniversihJ DONALD 0. PEDERSON, Professor, University of Califonzia LOUIS B. PERRY, retired President, Standard Ins11rance Company HOWARD VOLLUM, Chairman, Tektronix, Inc. WILLIAM D. WALKER, Executive Vice President, Tektronix, Inc. EARL WANTLAND, President, Tektronix, Inc. FRANK M. WARREN, retired Chairma11, Port/mid General Electric Co.

OFFICERS HOWARD VOLLUM, Chainnm1 of the Board EARL WANTLAND, President and Cltief Executive Officer WILLIAM D. WALKER, Exerntiiie Vice President and Chief Operating Officer LARRY N. CHORUBY, Group Vice President and Chief Financial Offtca LAWRENCE T. SU1TER, Group Vice Preside11t WILLEM B. VELSINK, Group Vice President FRANOS DOYLE, Vice President DAVID P. FRJEDLEY, Vice President CHARLES H. FROST, Vice President FREDERJCK L. HANSON, Vice President STANLEY F. KOUBA, Vice President JOHN L. LANDIS, Vice President HOWARD W. MIKESELL, Vice President WILLIAM J. POUTS, Vice President JONS. REED, Vice President PHILIP J. ROBINSON, Vice President PETER R. STRONG, Vice President R. ALLAN LEEDY, JR., Secretary mid General Cv11nsel KENNETH H. KNOX, Treasurer BfLL J. ROBINSON, Controller N. ERIC JORGENSEN, Assistant Secretary EDWARD J. LEWIS, Assistant Secretary FLETCHER C. CHAMBERLIN, Assistant Treas11rer

SHAREOWNERS' MEETING The annual meeting of shareowners of Tektronix, Inc., will be held on Saturday, September 24, 1983, at 9 a.m. Pacific Daylight Time, in the Assembly Cafeteria Build ing, S. W. Karl Braun Drive, Tektronix Industrial Park, near Beaverton, Oregon.

Exchange Listings: Corporate Office: New York Stock Exchange Tektronix, Inc. Pacific Stock Exchange 4900 S.W. Griffith Drive Beaverton, Oregon Transfer Agent and Registrar: Morgan Guaranty Trust Company of Mailing Address: New York, New York Tektronix, Inc. Beaverton, Oregon 97077 Indenture Trustee: Citibank, N.A., New York Telephone: (503) 627-7111 52 Weeksto 52 Weeks to Increase May 29, 1982 May 28, 1983 (Decrease)

$1,221,000 100% $1,124,000 100% $(97,000) - 8% CUSTOMER ORDERS, some of which were

321,000 26% 253,000 23% (68,000) -21% UNFILLED ORDERS at year-end.

$1,195,748 100% $1,191,380 100% $ (4,368) SALES REVENUE comprised of

567,994 47% 526,681 44% (41,313) - 7% INSTRUMENT products,

441,420 37% 455,336 38% 13,916 3% DESIGN AND DISPLAY products, and

186,334 16% 209,363 18% 23,029 12% COMMUNICATIONS products-sold to

729,369 61% 734,223 62% 4,854 1% UNITED STATES customers, and

466,379 39% 457,157 38% (9,222) - 2% INTERNATIONAL customers.

14,470 2% 12,601 1% (1,869) -13% OTHER REVENUE from non-operating sources.

$1,130,765 95% $1,155,267 97% $24,502 2% LESS COSTS AND EXPENSES to be paid

581,269 49% 613,637 51% 32,368 6% TO EMPLOYEES who design, produce, sell and service products or who support their efforts;

436,726 36% 448,807 38% 12,081 3% TO SUPPLIERS for materials, components, supplies, services and the use of their property and funds;

56,297 5% 26,113 2% (30,184) - 54% TO GOVERNMENTS as taxes in the United States and abroad-and to provide

56,473 5% 66,710 6% 10,237 18% FOR FACJLITIES depreciation which allows for the use, wear and aging of buildings and equipment.

$ 79,453 7% $ 48,714 4% $(30,739) - 39% RESULTING IN EARNINGS to be reinvested in the business and for dividends to shareowners.

$4.25 100% $2.57 100% $(1.68) - 40% EARNINGS PER SHARE based on average shares.

.98 23% 1.00 39% .02 2% DIVIDENDS PER SHARE paid to shareowners.

Tektronix' business is to develop, manufacture, sell and service electronic measurement, display and control instruments and systems that are used worldwide in science, industry and education. Since its founding in 1946, Tektronix has played a major role as a supplier of tools that contribute to the advancement of technology. The most anguishing part of the year was having presided over an employee layoff, and having let people down who were counting on us.

However, the financial pages also fail to reflect other aspects of our year. And those are positive aspects. To make sense of that year, you'll need a balanced picture of the things that went wrong and the things that continue to go right. In some cases that picture involves long-term programs whose MAKING IT THROUGH 1983 effect can't be foretold, so it may not be crystal clear. That dill-pickle look on your face says you have But we'll do our level best. just read our Hi ghlights, as they are euphe­ For now, may we give the good news equal time: mistically called. They once again reflect a tough year. Our earnings took a pasting. The Right Stuff It was a disheartening time in many ways, and We are working our way through hard times, figures can never convey them all. The year before, with innovative products founded on formidable we had tried hard to hold our workforce together technology. until things picked up. To that end we used a We've long been one of the world's techno­ mishmash of options, including shutdown days logically richest companies, never more so than and weeks and allowing inventory to grow past this year. This is high-Tek. prudent bounds. But we ran out of options before Dispensing Technology - Our advanced re­ we ran out of Recession. search group is no ivory tower. Coupled ever more At first, our president comments, you figure you tightly to our businesses, it supplies them not only can just grind your teeth and tough it out. But after with sophisticated components but also with train­ awhile, that no longer works. For one thing, he ing, to bring their engineers up to speed on latest adds, you have no teeth left. techniques.

TEKTRONIX' 8540 software integration unit {right) now can be used with Digital Equipment VAX computers. Our new 4105 terminal, shown here, provides the only color user interface offered by any micro­ processor software devel­ opment system. It would be easy to become awash in technology, with more promising avenues than we could ever pursue. Our choice used to be: Invest in it, or drop it. Now we have ways to keep our technology and share it, too. We are developing new means of sharing the cost and effort of technological or product development, including through joint ventures. We also will pump technology out into the world through what may prove to be among the most ALL THE pieces at left can significant ideas of the year: Strategic Program be assembled in nine min­ utes, using only 10 screws, Units (SPUs) will exploit specific product or tech­ into the 4105 color termi­ nology avenues, in a more free-wheeling way than nal, shown by members of through our traditional Tek business structure. the project team. This report describes several SPU activities. The Best Product Line in a Long While- A year ago, our Information Display Division was eating Quality, Reliability, Buildability all up. Quality the dust of competitors, who had gotten into color increased- modestly, as it should. A large increase raster displays ahead of us. Our portable oscillo­ would point to something having been really scope line was growing old, and that market was wrong. Thorough customer surveys (and our own threatened. picky audit of outgoing products) affirm that our This year saw resurgence of IDD with both low­ quality exceeds that of competitors. end and high-end products. It is making a strong We stand behind our product reliability, with we run to regain its lead in the graphics market. And believe unmatched warranties on portable scopes our new family of outstanding Tek portable scopes (three years) and graphics terminals (one year). has set new performance marks for the industry. And, despite their complexity, our new products In explosive newer markets, we extended our are getting easier and easier to build. We can lead in logic analyzers, and continue to run up assemble a terminal before you can read the next front in microprocessor development systems. four pages. The best year ever for The Grass Valley Group underlined its pre-eminent worldwide position in high-quality TV switching, routing and transmis­ The 410S's versatile display sion equipment. Other new television products stand tilts, swivels, glides and elevates to suit the brought heartening early sales. user's preferences. Long-established products also did well. Spec­ trum analyzers gained ground on the leader; we're an ever closer number 2. A state-of-the-art version of our semiconductor test systems has pushed that venerable product line to the forefront of advanced VLSI testing. In oscilloscopes, our laboratory prod­ ucts (even those 10 years old) now can become digital scopes overnight, thanks to a new digitizer plug-in. OUR INSTRUMENTS Divi• sion, like the rest of Tek, is making increased use of computer power in its design work.

Running Short of Shortages. Last year, short­ Our manufacturing resources planning (MRP) ages of Tek-made components were a source of program, a massive system of meticulous disci­ embarrassment and product delays. This year you plines, moved further toward completion. Where it don't hear of many - a dramatic turnaround in has been put into place, we see improved effi­ quality and delivery. ciency; this year MRP enabled one division to free The Subdividing Company-We continue the up $25 million through better management of decentralizing process. Central groups are being work-in-process inventory. dissolved, and divisions themselves are now sub­ Financial Strength-We are a financially robust dividing into business units. It is clearly the way to company. Our cash flow is positive; we have rela­ go. Where it is farthest along, we see more and tively little debt; our balance sheet is strong, our more signs of improved productivity, better mor­ assets impressive. We are poised to grow fast once ale, clearer sense of direction, stronger customer the chance comes, with ample capacity in first-class awareness and creative business approaches. plant and equipment. Despite flagging sales, we've substantiaJly increased our investment in engineer­ ing and research. Rough Times are Themselves a Plus - They provide a crucible in which to temper and toughen our mostly young divisional and business unit managers. What better, more rigorous training ground could you want?

FABRICATION OF inte­ grated circuitry requires painstaking care. The worst of it is that earnings were down 39 percent, to $49 million from $79 million last year. Eamings per share fell to $2.57 from $4.25 a year ago, a 40 percent drop. (Our early retirement program accounted for 59 cents of the $1.68 decrease.) Sales, considering the soggy economi.es of the world, were respectable: $1.2 billion, essentially flat. The US portion moved to $734 million from $729 million; the international segment, to $457 mil­ lion from $466 million. These were the contributions to last year's net sales for the products of our three operating groups, as well as to sales for other recent years: Instrument Products 1979 $435,108,000 55.3% If We're So Smart, Then Why Ain't 1980 $504,380,000 51.9% We Rich? 1981 $507,630,000 47.8% None of which in any way disguises the year's 1982 $567,994,000 47.5% unsavory financial figures. In the sedate language 1983 $526,681,000 44.2% of annual reports, these are what you usually call Design Automation and "disappointing" results. That wasn't the first word Information Display Products that came to mind, however. 1979 $242,745,000 30.8% Poor forecasting played a great part. To predict 1980 $327,078,000 33.7% the economy is hard, and you have little real help. 1981 $391,149,000 36.8% As past years attest, you can get about equally good 1982 $441,420,000 36.9% advice from your economist or your barber, but 1983 $455,336,000 38.2% at least the barber gives you a haircut with the forecast. Communications Products No one would go about making economic pre­ 1979 $109,083,000 13.9% dictions unless he or she had to. But companies 1980 $139,848,000 14.4% have to. That is, somewhere along the line, they 1981 $163,055,000 15.4% 1982 $186,334,000 must put their money (and shareholders' money, 15.6% and people, and materials) where their mouths are, 1983 $209,363,000 17.6% and prepare for whatever direction they expect the economy will go. We have never gotten the hang of it. We were off EXPERIM ENTAL USE OF quite a bit last year and the year before. But those robotics in our Instruments tu.med out to be just practice swings; this year we Division seeks to elminate really missed it, our orders falling $300 million short jobs that are monotonously repetitive. of what we had counted on. It's one thing to admit owning a cloudy crystal ball. It's another to describe the damage a bad forecast can do. For one thing, it makes a lot of the other numbers look bad. For example, having made over $1 billion in sales is nothing to apologize for. But when you figure that we had armored up to fill 20 percent more orders than we got, you can see the costly over­ capacity that resulted. We forecast by asking each Tek business to make its best assessment of markets and product poten­ tial. Then our collective economic intelligence (which may be a contradiction in terms) turns into an internal forecast on which we base our planned expense levels. An off forecast results less from trusting eco­ nomic "experts" than it does from the natural tendency in a growth-oriented company toward optimism. But by mid-year it became clear that the eco­ nomic brightening we had kept "seeing" for over two years was not due to a light at the end of the tunnel. It was just that our eyes had gotten used to the dark. Incoming orders went limp, sagging to $1.1 billion from last year's $1.2 billion. That was a decrease of 8 percent. Unfilled orders at year's end stood at $253 million. Last year they totaled $321 million. Part of the drop in earnings resulted from our decision to increase our engineering expense from 9.1 to 10.5 percent of sales. We intend to continue a high level of R & D funding this year. The $30.5 million for our early retirement pro­ gram also subtracted from earnings. The optional program was elected by 783 of the 994 eligible employees. The dollar total represents the actuarial cost of pensions to be paid these people from now until the date they would otherwise have been eligible to retire. Other drags on earnings were unplanned. Cost of sales was termed "acute" last year-no, that was huo years ago; last year it went up past that. This year, while orders fell off, fixed costs remained fixed; so cost of sales went up one more time, from 50 to 52 percent of sales.

HIGH-VOLUME cathode­ ray-tube line has dramat­ ically reduced production time and increased tube ' yields. Part of that increase resulted from obsolete inventory. Our warehouses had not emptied them­ selves of our older products by the time this year's new models came on board. Additions to inventory reserves for obsolescence were $14 mil­ lion higher than last year's. Administrative costs went up by 11 percent. On the cheerier side, interest expense went down. We also got a break from lower income taxes, including research and experimentation tax credits. Tectonics, Inc.? The earth's crust, it has been reported, sits on SILICON WAFERS in the top ~f se_ver~ supporting "plates" that are slowly oven during fabrication of movmg m different geographic directions. Stu­ integrated circuits. dents of what's called plate tectonics reckon that this motion, if you just give it enough time, will plunk San Francisco up alongside Alaska and make To suggest that we expected all these out-of-sync citizens wonder which state to vote in. changes to take place in an orchestrated way, to the The worst trouble occurs along the fault lines, wavings of the maestro in Beaverton, would be to where one plate grinds against another, causing mislead you. earthquakes and aftershocks. Anchor Points are Elusive This report is about Tektronix, not tectonics, but Rock-climbers anchor three points (say, one there are some similarities. And this year we have hand and two feet) before moving the fourth. had our share of quakes and shocks. Today at Tek, all is change; it's sometimes hard to We have never seen so much change going find two anchor points, or even one. (Still, the on at Tek: More change, more kinds of change, changes must be made; but they can sure make more-major changes. And they are non-syn­ you grit your teeth.) chronous. Our MRP program moves ahead on one There is great need for reassurance; we have tried timebase. Divisionalizing progresses on another. to provide it. There is also great need for consistent Technology accelerates. New production methods manager communication; we haven't done as good change the shape of jobs .... a job at that. It's hard to communicate well when And the changes may appear to conflict. One you're gritting your teeth. goal of MRP is to provide consistenC1J in reporting; The above is our way of saying that we realize it one goal of divisionalizing is to enhance indi­ has been a very jittery time. We intend this year to vidualihj in business management. When these tec­ do a better job of communicating, so our people tonic plates grate, at the fault lines, it is easy to get will feel less like change victims and more like shaken up. change agents. Costs Get Out of Hand Another fallout of the multi-change environ­ ment has been a disturbingly sharp increase in over~ead-our least favorite way to spend money. The increase probably shouldn't be surprising; we have told you in past reports that the first few years' effect of MRP would be high expenses. We noted also that decentralizing was bound for a time to result in costly redundancy. Yes, we did say those things- but apparently we weren't listening. The increase still surprised us. ASSEMBLY of OF150 fiber­ optic cable tester, which has been widely adopted by telephone companies and others.

So the changes are costly. Does that mean the programs were unwise? No. They are essential things to do, if we are to become the company we expect and intend to be. We're going through what one vice-president calls "Cycling through the whoops!es." It's much like the design of an instrument. The first version has bugs in it. So the time arrives for what we call "tweaking." Some redesign here, a more-efficient process there, a different component . .. Sooner or later a Tek-quality product emerges. So it is that our MRP, our decentralizing, our advanced computer systems all are going through We've found it easier to dissolve centralized the tweaking stage. That will mean a hawk-eyed re­ functions than to do away with the centralized look (as our managers have been informed) at just mind-set. Now and then, no sooner has the central what is essential and just how fancy it need be. A group been subdivided than a suspiciously bureau­ do-without bias is not a bad attitude, for starters. cratic-looking duster of staff has formed in the new There is nothing elegant about the tweaking pro­ smaller unit. cess. But we have found it to be pretty damed effective. And we expect it to yield an organization These people additions, we hasten to say, are for that is itself a Tektronix-quality product. good purposes and meet stated company goals. But, with the desire to do the new job well there Trying to Forget a New Word sometimes comes an appetite to do it the nicest and We want to purge our vocabulary of the word best way. "layoff." We've always viewed that practice with There is a duplication of functions. Our old MRP distaste. Living with it this year has only reinforced system must keep running until the new one is fully our feeling. The idea that having done it once might in place. Our central groups must provide vital make it easier the next time is not valid. It is an services until divisional ones can take the baton. undesirable practice. We would prefer to forget we ever knew the word. Our layoffs, which began in October, had affected 1,613 employees by year's end. Of them, 766 found other jobs at Tek. Management textbooks be hanged; there's noth­ PROTOTYPE model of v S-3295 semiconductor test ing scalpel-sharp and surgically clean about layoffs. system is used at Tektronix At Tek, where employees receive not summary for engineering software development. System is dismissal but time in which to seek other work one of few products able here, the process tends to be a lingering and some­ to test high-density "superchips." times painful departure. It is hard on the people, on their well-wishing co-workers - and probably on morale. Those who did find new jobs here, however, probably appreciated the grace period. The full cost of the program ($30.5 million) must be charged to this year; so its first effect is entirely on the expense side. But over the years we expect that the reduced payroll will mean a net savings. It was a much-deliberated decision. Those 783 One pressure toward workforce reduction is people represented more than 19,000 years of Tek unavoidable: Increased automated manufacturing experience. That can be measured. What can not be and testing mean our newer products will require measured is the collective impact they have had on fewer labor hours than our older ones. We have no Tek-or the effect on us of losing their cumulative choice in this matter. In a world of shrinking mar­ experience. gins, we must continually improve productivity. We could go on and on about many of them; And, over the long pull, it is a plus. It makes our they'd been here a long time, and we know most products more affordable, increasing their sales of them well. They have been our friends, our co­ and thus our total employment. workers, our managers, our teachers, in many cases our role models. Tek will be a different place without them. As Tektronix divisionalized, most employees Including layoff, early retirement and normal kept their jobs or found new ones. But not all; for attrition, our employee total dropped to 21,078 some, the process may have felt like losing at musi­ people, from 23,231 at the end of last year. cal chairs. Some with longer tenure, who had invested many of their years in their existing jobs, found suitable new work hard to find. To enable them to pursue work or personal goals - and to provide a needed reduction in payroll­ we offered early retirement. Employees at least 50 years old who had 20 or more years' service (and those who retired during calendar 1982 and met those criteria) could choose the option. Of them, 783 took the opportunity.

INTRODUCTION OF advanced 2000-series port­ ables was an intense learn­ ing experience, even for old hands at scope sales. Above, assembly of the state-of-the-art 2465 portable. YOU CAN'T AUTOMATE the intricate hand work required for harness wiring of a Grass Valley 1680 series production switcher. Com- plicated task takes many skilled hours. NEW 110S frame syn• chronizer, our Television Products business unit's first signal-processing product, outperforms the present industry standard in head-on comparisons. The Hardening Nose As we drew a bead on Tek-made-parts suppliers - asking 100 percent quality, on-time delivery - some outside vendors got caught in the sights. We've now begun to ask those standards from outside suppliers of common-usage parts also. The results are increased quality, better deliveries and reduced manufacturing costs. And it has meant the near-death of an old saw that says never to rely on a single source of supply. (That adage may have begun in a speech to some local purchasing association, accepted as gospel because the speaker was from out of town.) We now find we have had hordes of suppliers for even garden-variety components. That's bound to cause dilution of quality; it's sometimes hard enough to find one who is competent. As a result, we were routinely accepting faulty parts. (We even, Back orders are now only a third of what they in a helpful way, once set up an inhouse group to used to be. And quality level has improved; it's repair the bad ones.) easier to find one or two good vendors than to Our supplier list went on and on, with more assure quality among a half dozen. Also, we now than 2,500 names. We're whittling away at the have time to develop good solid relationships. FIBER OPTIC cable is con­ number by selecting only the best. We' re less toler­ The result has been that our customer-supplier nected to this board. A ant of late or flawed deliveries, and we tend more relationship has a partner feel to it. laser diode sends light toward single or linuted supply sources. That relationship is based on trust. We share down the cable. QuaHty standards have toughened. If you_can with vendors sensitive information on parts needs, make one part right, you can make 1000 parts nght, and a *rolling forecast" of our requirements, so we always say. Whatever their reaction to this and they'll know what's coming. We maintain one other folksy mottos, most suppliers like the new another's information in strictest confidence. relationship. (Not all, of course; one told us we were Our 100 percent quality program has four steps: crazy.) 1. We make sure we and the vendor are using We were devoting a huge warehousing area to the same specifications. office supplies, all neatly tagged with Tek part 2. No specs are changed without an agreement. numbers. Now a single source provides almost all 3. All quality or delivery problems are resolved of them, and does the warehousing instead of us. i111111edintely, and the root cause eliminated so they We've done the same thing with abrasive materials won't recur. and cutting tools. On-hand supplies of packing 4. Suppliers then receive Tektronix accreditation. materials will be reduced 80 to 90 percent. By that stage, we will expect weekly deliveries Thanks in part to this stockless purchasing pro­ directly into manufacturing, with no need for gram, we've vacated great amounts of warehouse redundant incoming inspection. space. More will be emptied. A Key Supplier Program (SO top suppliers included) includes regular half- to full-day per­ formance reviews, preferably with suppliers' top management. In these reviews, vendors see where they rank among the 50 and how they're doing as to quality, promptness, responsiveness and recur­ rence of problems. They, not we, set their goals; all we ask is contin­ uous improvement. They, not we, do the precondi­ tioning and testing of parts and materials, to our standards. Why should suppliers be happy with our harder-nosed attitude? 1. Our confidence in their quality assures their business. 2. They get larger orders than when we parceled our business out. 3. Meeting Tek standards is a marketable cre­ dential; suppliers can use it when they seek other business. THE FAMILIAR MARKETPLACE Over its history, Tektronix has changed. Its prod­ ucts have increased in both number and sophistica­ tion. And the technological world has moved with OSCILLOSCOPE testing boggling speed. area, Vancouver, Washington. But our mix of customers is about the same. Of course, there are more of them. We have over 50,000 commercial customers, none of them domi­ nant; no one commands as much as 4 percent of Tektronix' business. Our major product remains the cathode-ray oscilloscope; we've led the world in scope perform­ ance from the first model we built; and in scope sales for all but our startup years. But Tek products have moved in many directions beyond that. Some were extensions of oscillo­ scopes; they eased their way into our product line either as plug-ins for our lab models or as specially designed scopes - such as spectrum analyzers, logic analyzers and TV waveform monitors. Others were outgrowths of the display technology devel­ oped to support oscilloscopes. A spinoff from storage-scope CRT design resulted in our extensive line of graphic terminals. Other Tek products have not evolved from, but been added to, our oscilloscope base. Key among them are microprocessor-development products and other software design aids, and TV production and routing switchers and special-effects equip­ ment. We are one of the world's two largest makers of test and measurement products. Typically our products lead their markets; second most typically, they are runners-up. As noted, the makeup of our customer base has changed only a little. Broadly, our high-technology tools are used worldwide, throughout science, industry and education - to do research, or to design, build and test things. Tektronix directly serves customers in all major Free World nations, and is represented in 48 coun­ tries with smaller markets by 51 commercial distributors. The US accounts for about 60 percent of our sales in a given year. The rest are made to other coun­ tries. They are principally France, The United Kingdom, Japan, and Germany, followed by Can­ ada, Italy, Switzerland, Sweden, Australia and The Netherlands. That ranking jiggles around from year to year, but those are usually the front­ runners.

CIRCUIT BOARDS are inserted and tested in the pedestal of our 4115B color graphics terminal. NEW OF150 fiber-optic cable tester completes its final assembly in Teks Communications division. Below, testing of a portable spectrum analyzer.

Who Uses What We Build? Then come broadcast and other kinds of televi­ Manufacturers of electronic and electrical equip­ sion, including commercial and industrial cable ment make up our biggest customer segment. and closed-circuit systems. These companies build a wide range of products; it The list goes on. It encompasses all human includes telephone and communications equip­ industrial, scientific and educational purposes. Sig­ ment, aerospace equipment, industrial controls, nificant customers include petroleum and other home appliances, radar systems, radio and televi­ energy producers; chemical companies; transpor­ sion sets, and the like. tation agencies; printers and publishers, and the The computer industry is the second-largest medical field. segment. These companies design and build main­ The biggest changes have been to serve the frame and smaller versions- mini and microcom­ recent growth in digital (usually computer-related) puters - and their peripherals. applications; and the rise of software design to an Governments, taken together, are our third big­ equal footing with hardware design. gest market. Typically they buy our standard com­ mercial products. The US government is the largest of these; but foreign, state and smaller units also make wide use of what we produce. Education is the next segment: universities; med­ ical schools; vocational and technical institutions; graduate or other investigative laboratories, and general classroom use. There is more electronics, less chalk, in the classroom today. Instrumentation companies (we are an instru­ mentation company) are the next-largest customer group. CONTINUING POPULARITY greeted our 492 portable spectrum analyzer this year. Its rugged high perform­ ance has made it a favorite of military and other users that offer a rough environment.

Basic Electronic Tools interchangeable plug-ins. Our portables range in Our major product, a ubiquitous one, is the size, down to ones you can hold in one hand while oscilloscope. It graphs the time versus the ampli­ you operate them. Portables have fixed perform­ tude of some event within an elechical circuit. Its ance, no plug-ins. The top of our portables line CRT phosphor screen displays a v.ravefom1 caused encroaches on lab-scope capability. by focused electrons hitting it with great force. The Plug-ins for lab models include amplifiers to display allows study of pressure, velocity, nuclear expand either the time or the amplitude segments phenomena, heat, strain, sound, biological signals of the display. That enables the scope to acquire a -anything that can be converted into an electrical wide range of signals. Plug-ins also include multi­ waveform. meters, counters, both spectrum and logic ana­ Scopes differ in bandwidth (how wide a range of lyzers, and digitizers. signals they can measure) and sensitivity (how Some storage oscilloscopes contain Tek­ small a signal they can detect). Readout on the CRT designed CRTs that retain the written image on the screen has made them increasingly useful; so has screen. Others store by breaking a waveform into addition of "intelligence" by using microcomputer digits, stashing them away and then putting them chips or being coupled to a computer; both enable back together in a replica of the signal. added analysis of waveform data. Other test and measurement products include In our broad oscilloscope line, our larger lab­ programmable and manual modular instrument bench models can vary their performance by systems, data communication testers, spectrum adding and mixing up to four of a wide number of analyzers, pulse generators, amplifiers, logic analyzers, semiconductor curve tracers, micro­ processor development aids, optical and elechical cable testers, and power supplies - plus accesso­ ries including probes, attenuators and waveform cameras. Information-display products include graphic computer terminals, that display pictorial as well as verbal data, in monochrome or color; graphic com­ puting systems, which function as desktop com­ puters or interact with a host computer; hard-copy units, which make paper or transparent copies of High-tech or low, being able to design com­ CRT screen contents, in black-and-white or colors; ponents to match a product's needs (as well as display monitors, and digital plotters. configure the product to take full advantage of Some of our terminals and all our computing component design) has led to exceptional systems are "intelligent." That is, they incorporate performance. or tap into computer power. Other reasons-including lack of outside sup­ Some of these are raster-type, rewriting the pliers - also have added to our heavy vertical image all the while it is being viewed, as on a TV integration. However, supplier availability is set. Others use the tube itself to retain the written changing. So is our outlook on what we should image; these are capable of extremely fine-line build and what we should buy. We' re cutting down resolution. on our number of in-house functions, such as rou­ Specialized products for use in the television tine metal-bending. We'll keep those that cost too industry are waveform and pich1re monitors, sig­ much outside or require that the supplier be close nal generators and vectorscopes, all of which test enough to the product to know just the kind of and display the quality of video transmission; and component it demands. frame synchronizers. The Grass Valley Group, We build cathode-ray tubes (except for raster­ Inc., our California subsidiary, builds production type); integrated circuits; thick- and thin-film and routing switchers, special-effects systems and hybrid circuitry on a ceramic base; etched circuit signal-transmission equipment. boards; transformers; precision capacitors and resistors; inductors; relays; oscillators; coaxial Custom-Tailoring the Parts cables; waveguide mixers; some semiconductors; Often our products attain their high standards some phosphors, and a wide variety of plastic and because of Tek-designed and built components. metal parts, many of them unique to our products. Many of these are high-technology ones, such as the integrated hybrid circuits that enable the high performance of our new 2400 portables. Others are lower-technology but done with extreme attention to our unique needs.

ANY TEK LABORATORY oscilloscope can now be instantly converted to digi­ tal use by inserting our new plug-ins. The 7020, shown here, was designed for use with 7000-series lab scopes. Above, its "enve­ lope" mode, setting the bounds for go/no-go tests, allows less-trained people to use the 7O20's capabilities. SHARPENING THE COMPETITIVE EDGE Among the trungs that make sales are (1) A kit­ bagful of new products; (2) Built-in long-term prod­ uct value; (3) A trained sales force that hustles, and (4) A stout economic wind at your back. This past year our sales held just about level. Level doesn't mean up, of course, but that still was a creditable showing in a time when the world's economies were going, at varying rates of speed, to pot. That we did maintain sales level was due mostly to numbers (2) and (3) above. For there was no wind; the markets seemed becalmed. And, in gen­ eral, other companies had very competitive prod­ ucts. But our highly trained and now-division­ FINAL TROUBLESHOOTING of 5-3295 semiconductor alized sales force, aided by our traditional product test system prepares it for value, held the line. It takes more than just being shipment. new to supplant a Tek product. The coming year we'll be better off. We now offer the market our newest and strong­ est product line in several years. We have under­ lined our leadership in oscilloscopes with a superb new portable family. We have come back strong in information-display products, offering superior price/performance at both the low end and at the frontiers of color display. New Tek and Grass Valley television products are exciting the broadcast industry. And new logic analyzers show that the Design Automation Division does not intend to loosen its grip on its leadership position. Also, there are signs of an upswing in the US economy. Or we think so. But then, you know us and our forecasts. The following 16 pages describe and picture the year's new products, as well as other aspects of the virtuoso technology that made them possible...... ,•~· ••··•••···••·•·•••····••~~ •··••••·•••···••·•·•••••••····••·••••••·1••• •••••, •••••••••••••••••••••••••••••••, .,• ••••••••••••• , ••••••••••••••••••••• ., .,. 11111111•~ •·.....··..···"~ ..... · The Unicorn provides one prong (so to speak) of IDD's bid to reassert leadership. It serves the low-price end of the market. Creating equal excitement at the high end is our state-of-the­ art 4115B terminal. It offers the finest color graphics available in the world. performance standards for the And, to make both lines ofter­ graphics market. minal fully useful, we have Our loss of leadership was brought out two models of due to a combination of (1) a Tek advanced color inkjet copiers. storage-tube technology that led Response to all these products a longer profitable life than we Raster probably would have has been first-rate - beyond our had expected; (2) the resulting encroached on DVST slowly had rosy expectations. wishful thought that it might it not been that the market began even be immortal, and (3) qual­ to want color graphics, which ity problems at a crucial time. our storage tube didn't provide. uThe Giant (meaning us) Pre­ Tek really created affordable So, we did do some work on ras­ The Wizardry of IDD pares to do Battle" read a typical computer graphics with its in­ ter displays. But the demand for When the horse showed up at trade-press headline. That troduction in the '70's of inex­ our DVST products continued work at our Wilsonville plant, it pretty much tells the story, pensive terminals using the high, particularly OEM sales (to might have seemed unusual. except it suggests the giant had direct-view storage tube (DVST), other companies, to be built into But it was disguised as a unicorn, been spending some time twid­ whose phosphor screen retained their products). So our own ras­ so people took it in stride. dling his thumbs. The headline the images. ter effort putted along, is all. Unicorn mania infused the needs a few more words: "With Our DVST products enabled place this year. uUnicom" is our low-cost, high-performance Better Weapons." "UNICORN" FAMILY of low• code name for our Information We had been twiddling one monochrome graphics. Com­ cost, high-performance Display Division's new line of thumb. As we reported to you peting raster-type tubes, which graphics terminals begins low-cost, high-performance last year, we had lost some required continuous rewriting of vith the 4105 (seconcffrom the display, cost too much to left.) Other members will color terminals. They are help­ market share to other tube tech­ be the 4107 (left) and the ing spearhead Tek's strong nologies, thus sliding to a posi­ operate and gave less-sharp 19-inch 4109. At right is our comeback in the graphics mar­ tion of catchup. images. .-.110 graphics processing ket. There were Unicom bumper With this year's top-to-bottom Raster got better and quite a unit, which enables the ter• minals to become stand• stickers, Unicorn T-shirts ... So refurbishing of the product line, bit less expensive. But our DVST alone graphics computers. when the real item showed up, it we have more than caught up. We technology got better, too: Our 4695 inkjet color copier fit right in. once again set both the price and Brighter, sharper, larger-screen. 1s in front.

' ~ . COLOR COPY made on Tek 4691 inkjet copier from a CRT display. 8uildability is excellent. We tried to make the Unicom a snap to assemble - literally, figuring out ways to do away with screws and have the modules snap together. We came close; it has only 10 screws. We were shooting for a final So our strong rebound assembly time of 15 minutes. It shouldn't have been a total sur­ actually takes only nine. prise. What some Monday­ The 4105 was introduced at Automatic Tuneu11 fN morning technical experts $3995; the other Unicom models the CRT portrayed in the trade press as will be the 4107, which will have The 41158 (there is no •A•) pro­ the demise of Tek graphics better display, more-powerful vides the highest-quality color was really a pause (however em­ graphics and the ability to con­ graphics available on the market. We recognized the color barrassing) to retrench. trol more peripherals; and the A special feature is a provision threat, and made some guesses All our new products are com­ 4109, a 19-inch-tube version. for autoconvergence, to insure as to how fast it wouJd overtake patible with each other and with Through use of the Tek 4170 that the high-resolution color us. But we called it wrong. In a preceding Tek models, making it graphics processing unit, these image stays put. market that wanted color raster, tempting for a user to upgrade. terminals become stand-alone In a color CRT, three guns our strength remained in black­ graphics computers. (one for each primary hue) pre­ and-white DVST. Demand (par­ Copies: The Unicom offers a warranty cisely fire electrons through ticularly OEM) dropped fast. We The Missing Link unmatched in the industry - a perforated mask to strike even helped it along by running Tek realized early that being a full year. On most termi­ assigned color phosphors. If any into a spate of bad luck: Severe able to make hard copies of CRT nals you're lucky to get three gun is a bit off, it causes blurry or tube yield problems caused screen contents would be desir­ months. untrue color, and eye fatigue. long delivery delays. Our drop able in most applications - and The product line has already The 41158 has built-in circuitry in DVST orders turned into a essential in many. convinced one tough customer. that senses any gun misalign­ plummet. The major drawback to using We are buying and using them ment and automatically corrects That's the oft-toJd and sad part color terminals has been that all over in our Tektronix divi­ it. Just like having a car that gives of the story. However, we were most copiers do poor work - sions. itself a tune-up while you drive. in a stronger position than it producing marginal quality. We looked. We'd done many right believe that ink-jet technology things in our early days: will provide the best solution. So We had built a large installed we have added two superior ink­ base of Tektronix products jet copiers that give high-quality, worldwide; we'd made all our fast, cost-effective color copies IDD products compatible with on paper or transparency. one another; we had devel­ Unlike other means of copy­ oped strong customer loyalty; ing - pens that scritch up and we'd developed the industry­ down across the paper or impact standard software; we'd added printers that stamp the image in excellent hard copiers early on; colored dots - ink-jet copiers we had built the world's largest move the paper past the ink and most knowledgeable graph­ faucets, which paint the image. ics sales and service network; we had focused on a market we Impossible Mission? knew well, engineering and sci­ The Unicorn project had many "impossible" goals - ence; and, with years of CRT cir­ cuitry experience, we knew the hence its name, for the elusive display field like few other mythical beast. They included companies. producing a very high-quality color display-and making color easy to use, something no com­ pany had figured out how to do; making the products compatible with the rest of our line; hitting a tight deadline-and coming in with a price of under $4,000. Impossible goals are generally met, since they tend to raise adrenalin levels. We hit all our product-development targets USING software from (despite early troubles; our en­ VR Information Systems, whom we acquired this vironmental chamber ran amok year, an 1:ngmeer works on and melted down our first gate-array software devel­ model). opment. Te,k's new 4115B terminal and 4691 color copi€r are pictured. Like the Unicorn at the low end, the 4115B was also an *impossible" project that some­ how got done: Producing a ter­ minal that would be faster, sharper, brighter, better than DAD: Fast Stepping in a anything on the market; work­ Fast-Growing Market ing under tight deadlines. And it Our Design Automation Divi­ hit the market at a price far below sion followed a tough act to fol­ what competitors had openly low (its 1982 performance) with predicted. As a step in the right direc­ another tough act to follow (its Tek is clearly out to regain its tion, we have acquired VR Infor­ 1983 performance.) Sales in each position as the leading graphics mation Systems of Austin, business unit were strong, and market-maker. You can feel the Texas, a small producer of soft­ products brought out this year The 4115B rewrites its 19-inch up tempo at Wilsonville. ware for design and develop­ once again look like winners. screen at a 60Hz rate. Common *The Graphics Empire Strikes ment of printed circuit and IC Our product introduction has in the industry is 30Hz; and that Back/ reads a prevailing bumper software. It is at the leading edge continued at a very rapid rate. causes flicker. It can write 1024 x sticker. That's the kind of thing in computer-aided-design That may have given rise to the 1280 discrete points, and hold we mean. applications for electrical rumor that divisional strategy much more than that in its mem­ engineering. is: Bludgeon the competition ory. (It's been said that such reso­ Applications Software on with new products. (That might lution could delineate a 3 cm. the Way look better in Latin.) More spot along the earth's equator.) We're not out of the woods demurely stated, our goal is to It has a graphic drawing yet. Although we have the top keep ahead of customer needs. speed of about 50,000 vectors utility software (enabling opera­ The division has been grow­ per second, faster than any other tion of our products), we have ing faster than its markets; the terminal we know of. And it can developed little applications markets faster than the elec­ display more colors at once than software, to help users solve spe­ tronics industry, and the indus­ anyone knows what to do with cific graphics problems. We're try faster (big deal) than the US -up to 256. fixing that. economy. We moved from a number 1 position to a stronger number 1 position in the explosive logic­ analyzer market. We are first TEKTRONIX 4115B color graphics terminal offers (maybe tied) in universal micro­ exceptional flicker-free dis­ processor-development systems plays and great ease of use. also. Sophisticated design-auto­ mation tools like these are new ideas today; but by 1990 it's believed that most electronics engineers will have to use them. So it is an exciting market, and we are strengthening our presence. A heartening plus: An old Tek product line, giant "S" series semiconductor test systems, this year has come into its own. We have about a year's backlog, thanks to being one of few com­ panies whose products can test the new, very complex high­ density usuperchip" !Cs. The 1240 continues the modu­ larity we began in the DAS, by use of interchangeable plug-in cards to vary the number of channels of data acquired. (The 1240 can obtain up to 72 chan­ nels, using four cards.) And it extends that modularity through use of ROM (read-only memory) packs that enable analysis of acquired data, and COMM To round out our line, we packs, which provide interface introduced two superportables, with computers. weighing about 11 pounds each: The SONY/Tektronix 318 and 338. Sales of DAS itself continued These "friendly" analyzers strong, as did those of color pack powerful performance into DAS, still the only well-received compact space. They are menu­ color logic analyzer. Competitors driven, so the user doesn't have have tried color versions, too, to plow line-by-line through a but soon learned a sad truth: manual to find each next step. What customers want is not They have two major uses: For color, but color without penalty. field service of computers and Once you start trading-off sharp other digital equipment, and for COLOR DAS (Digital Analy­ screen image or other operating general lab use when several sis System,) introduced a advantages, color is not a very users must share one analyzer in year ago, has been a best­ attractive feature. different locations. selling Tek product. at the top of our logic analyzer line. An Easy-to-Manage Workhorse Logic analyzers, which pic­ ture and examine coded bits of data from many channels at once, have been called the oscilloscopes of the digital world. Someday they are bound Most analyzers uscroll" in this to be just as common. So, many way: When the user pushes a competitive analyzers exist. button, the data moves forward Some of them offer high per­ in jerks and jumps. Ours has a formance and versatility. Or so large knob, like a radio-tuning you might judge from the large knob, that enables not only but­ numbers of buttons, knobs and ter-smooth rushing through switches all over the front of masses of data but also easy fine­ them. Some have 70 keys. tuning to locate just the pieces In our continuing goal of mak­ you need to study. A simple­ ing instruments "friendly" rather sounding idea, but it took a lot of than bewildering, we've devel­ technology to work it out. We oped a touch-sensitive CRT dis­ call this advanced feature, inci­ play. It has about 50 control dentally, a Knob. commands available on the How do customers like the screen, activated by the touch of 1240? Well, its order rate exceeds a finger. those of our popular DAS 9100 This touch-pad is one of the and color DAS, at a comparable more popular features of our early stage of its life. medium-range workhorse ana­ The 1240 performs general­ lyzer, the 1240, new this year. purpose tasks, somewhat the TOUCH-PAD AREA on the When the finger breaks an way our portable oscilloscopes CRT screen of our 1240 logic infrared beam, operating in­ are used. The DAS is a more analyzer gives operating structions appear on the screen. advanced tool, more like our lab­ instructions at the touch of Thus our keyboard remains sim­ oratory scopes. a finger. That keeps the keyboard from getting clut­ ple, uncluttered. Other than for user-friendli­ tered with buttons <1nd Another ease-of-use feature is ness, the most important feature switches. rapid, smooth scrolling through of the 1240 is its dual timebase streams of displayed data. acquisition - another first. This is likely to be as important as was the first dual-beam oscilloscope, an early Tek innovation. This feature lets the operator com­ pare data from two separate sources; for example, two micro­ processors that must interact in a complex system. stages, is still a pen-and-pencil task. Still another big part is time-gobbling detail work with low-level computer codes. LANDS integrates four powerful programs: An editor; a compiler; an integration control system, and a PASCAL debug. reading mistakes in typed copy Each greatly improves designer rather than halfway through the productivity. printing process.) • The editor enables the user to • The compiler is a pretty stan­ give broad PASCAL commands dard one, only optimized for rather than to laboriously type mkroprocessor (µP) design. digital code into a computer. • The largest time-saver is the Most editors don't speak PAS­ hardware/software integration con­ CAL, so will pass on syntax trol system (ICS), for which we're errors uncorrected. The errors seeking a patent. It can reduce are caught later, when the pro­ months of tedious detail work to gram is run in the compiler. But a half an hour. Literally. then you have to run the whole SONY/Tektronix "superpor­ Perhaps the most error-prone tables• round out our logic shebang over. task in many µP designs is to fit These products vary in num­ analyzer line, offering LANDS' editor does under­ the software to the prototype ber of channels of data acquisi­ powerful performance in stand PASCAL, so it catches each hardware. That normally re­ tion and speed of operation. The n 11-pound package. syntax error. It's a sort of PAS­ quires extensive programming 318 is slanted more toward hard­ CAL word-processor with a lan­ in assembly code. ware applications, the 338 more guage corrector. The corrected First, our on-screen "menu" toward software. program then moves to the com­ prompts the designer to be sure Like the 1240, they may be piler. (It's like catching proof- to cover all the main points. operated over phone lines. A Then the ICS takes care of the less-skilled field technician can details, including generating all get instant help from experts thousands of miles away. the low-level code, oriented to whatever specific µP chip is A Powerful New Software being tested. "Tool" • PASCAL debug normally To most people, "software# is requires translation into assem­ still an abstract idea. And if that bly code. But LANDS solves the is a vague concept, now consider problem by elevating all debug the idea of software "tools." software to the PASCAL level. A major DAD product this Our PASCAL debug takes year is a set of "integrated soft­ advantage of the powerful real­ ware tools." One of the most time emulation provided by the complex software products we Tek 8540 integration unit, which have developed, it goes by the contains a µP identical to that in name of LANDS, Language the hardware prototype. Development System. Host-comp_uter support for It's an industry first. It lets a LANDS can be provided by the software designer bring the Tek 8560 software development entire design program under the unit or by the popular DEC VAX control of PASCAL, one of the computer system. top high-level computer lan­ guages. Use of "high-level" (English-like rather than com­ puter-like) language in software is roughly like use of push-but­ to n operation in complex machinery. The user devotes his or her attention to the problem at LANDS (Language Develop­ hand, and doesn't have to deal ment System) is one of our with (or even understand) the Ever more of an electronic most important software detailed workings of the tool. product's costs go for software, products. It is used here on detailed programs of instruc­ a new Tek 4105 color termi­ tions that make it do whatever it nal. Our color interface, ColorKey + · is the only does. As microprocessor hard­ one offered by any micro­ ware gets more complex, soft­ processor development ware does too. system. Strong efforts are being made to automate the software designer's job. But much of it, particularly in the conceptual Passing the Baton in rta · e~ It depends on just how you go about measuring it, but: The Tektronix 2465 portable oscillo­ scope may embody the greatest concentration of technology of any Tek product, ever. At least it's right up there. And it has done something as remarkable: A.PPI.IC"ATIONS ENGINEER jebugs an IC test program, Returned glamor, if you will, to Systems Orders Show c1 age (with nearly 100,000 devices using a giant Tektronix oscilloscopes. Healthy Trickle on the chip) is not uncommon. ->·3295 semiconductor tes1 Let's face it: Scopes are old­ uonesy-twosy,6 our term for Systems that can test such ;ystern. Ours ts

metal device that expands the beam. Three sets of quadripolar lenses in the CRT gun (like those in a particle accelerator) "pre­ process" the beam, flattening it on two axes into a configuration that lets the MSE lens do its job. Together they provide a super­ sensitive CRT. Further, they're designed to The tube is also an inch be built efficiently. Each entails shorter thana conventional CRT, less labor than the scope it which knocks an inch off cabinet replaces - a nice offset in these depth and a tad off the weight. days of skinnying margins. And it is rugged-able to with­ Last year's 2213 and 2215, the stand a 150 G shock. Technical first scopes ever designed for people will understand how high-volume production, saved much of a jolt that is. Other folks labor hours by pioneering use of The New Standard: 2400 Conventional CRTs require shouldn't give themselves one single circuit boards and large­ Superlatives all fit the 2400s. more power than an IC can gen­ just to find out. scale automatic component They abound in so much innova­ erate. Our new 2400 tube is very The 2400s also provide a new insertion. They drew a tough tion that it's hard to know which sensitive, able to give a finer, high in automatic triggering for assignment: To provide a price/ "first" comes first. brighter trace than standard portable scopes. Those of you performance barricade at the It's the first portable oscillo­ CRTs, yet operates on lower who are old-timers will recall "low" end of the portables mar­ scope to provide readout on the power, such as an IC can provide. trying to adjust the earliest TV ket, which was beckoning for­ CRT screen of time, frequency, The secret is our new mesh­ sets - first to get any picture, eign and domestic competitors. voltage, ratios, percentages, set­ less scan-expansion lens system. then to find the right one. You'll The products' light weight tings ... Maybe its most impor­ In most tubes, the electron appreciate that fussing to get first and reliable, full-featured per­ tan t single feature is a pair of beam from the gun is expanded a trigger, then the correct trigger, formance drew solid reviews. dot-dash cursor lines, which set to fill the CRT screen by use of a is one of the scope user's greatest They did their job, anchoring the the bounds for instant point-to­ fine domed mesh. The mesh irritants. Our "hands-ow auto­ low end for us. They became the point measurements of wave­ doesn't look like much, but is the trigger thus may be one of the fastest-selling Tek models in form data. The feature saves time very dickens to build, costly, a greatest emollients. history. and tedious calculations. And it major factor in both tube and Now the 2000 family has been never makes a mistake. scope rejects. It is allergic to Old Accuracy Marks Wiped rounded out. To the 60MHz 2213 The cursor feature may be as everything from overheating to Out-Really Wiped Out and 2215 and the 100MHz 2335, significant to oscilloscopy as was thumbprints - especially little The old Tektronix 465B, up to 2336 and 2337 field-service por­ the marked-off CRT graticule bits of dirt. And every mesh now the world's pace-setting tables, we've added the 100MHz itself (a Tek innovation, long problem translates directly to a portable, set the industry stan­ 2235 and 2236, the 150MHz 2445 ago). In fact, cursor plus on­ glitch on the CRT - a halo, dards for vertical and horizontal and the 300MHz 2465. The four screen readout of data nearly do "blooming," a dark spot . . .. accuracy. The 2400s have topped were introduced all at one time. away with the need for a grati­ We got rid of the problem by them - and by a large leap: 50 That gave the buyer a chance to cule, other than for single-shot getting rid of the mesh. In its percent better horizontal, 30 per­ make a truly educated choice. To waveform photography, which place we put a meshless scan­ cent better vertical. us, the nicest kind of compari­ precludes setting up cursors. expansion (MSE) lens, a non­ These gains come about son shopping is for people to descript yet precisely laser-cut largely from using digital cal­ decide which Tek scope to buy. ICs Drive the Display ibration. In effect, standard The 2465 has the most dazzle, The 2400s are the first scopes calibration instructions are im­ of course. But each model offers in which the CRT is driven by bedded as data in the IC memory a superior price/performance integrated circuits. itself. ratio to that of its predecessor. They contain by far the most integration of any oscilloscope. Eleven Tek-made custom hybrid ICs handle all the analog cir­ ettitry. Integration allows enor­ mous increase in compactness. Without it, it would have taken easily twice as much space to enable the 2400's performance. SUPERLATIVE CRAFTS­ MANSHIP shows when the cabinet is removed from the 2465 portable oscillo­ scope. Below, close-up of Tek-made ICs in a 2465. The 2236 (like the rest of the family) is user-friendly. Prob­ lems of various kinds in circuits being tested by the 2236 are noted by both audible and visible signals. A diode junction will result in a noise plus a display of the voltage drop. Leaky capaci­ And the 2400s let Tek trade­ tors, bad transformers? The 2236 show booth people do one of will catch your eye or ear or both. their favorite things: "Take the It provides the same combina­ top off the box• and let visitors ti~n as does our 7603 lab scope see the craftsmanship inside. with 7013 and 7014 plug-ins. We These products ooze quality. expe~t it will be just as popular. We've yet to see competition - It 1s useful in making timing even from companies (or coun­ and frequency measurements tries) known for high quality­ typical of the digital world. try that alongside ours. Operators of general-purpose electronics fix-it shops should This new technique provides Many Instruments in One also like it; each of its combined a high level of accuracy that The lower-performance 2235 instruments is something such otherwise would have to be and 2236 are alike save for the shops need. approached by use of carefully latter's integrated digital voltme­ . All the 2200s are designed to matched components and a lot ter/counter/timer. give general-purpose solid ser­ of adjusting. It also enables the The scope/DVM/counter/ vice, with a particular eye to scope to return to correct cali­ cost-sensitive buyers. bration at any time, since the timer provides a useful combina­ instructions are built in. tion of useful instruments. It enables some measurements not Another factor in better ac­ otherwise possible, and makes curacy is a front-panel control some hard ones pushbutton­ that adjusts for any timing mis­ easy. Digital readout allows less­ match between two probes. trained people to tackle the prob­ Still another cause of better lem at hand without getting accuracy, and of improved high­ mired in math. NEW 2465 portable scope speed scope performance, is undergoes extensive auto­ active laser trimming, a man­ mated testing. ufacturing step. Each IC is run bit of the width of an oxide path, under actual conditions and its bringing the circuit to near-per­ electrical performance fine­ fect performance. tuned. If capacitance or The alternative would be to resistance is too high, a laser test the completed IC later, when beam automatically trims away it's inside the scope, and adjust part of the circuit. things at that point by laborious In our hybrid ICs, passive "tweaking" of the circuitry. It electrical components and circuit works. But it takes time. And it paths of conductive metal oxide occurs awfully late in the man­ have been silk-screened onto ufacturing process. Also, tweaks ceramic and fired at high tem­ can come untweaked. Laser peratures. In the "trimming" trimming cannot. It is done once process, the laser merely erases a and lasts. The 2445 and 2465 vary in sweep speed and bandwidth. Each has four channels, two of t~e~ optimized for logic apphcahons. These scopes fit well into advanced work such as semiconductor R & D, and high­ speed digital design and trou­ bleshooting, including of µPs and mainframes. Viewers Are Quality­ Conscious It may be (or not) that the Typical TV Viewer is the under­ shirted brew guzzler that is so often depicted. In any case, don't sell him short. He is a very keen judge of picture quality, and intolerant when video sig­ ENGINEER TROUBLE­ nals do bad things. GVG leads the world in high­ SHOOTS a 300 series TV quality transmission of televi­ production switching sys­ To help inform and entertain tem at The Grass Valley that viewer without technical sion signals. Its new 3290 series Group, Inc., our California distractions is the job of of fiber-optic links carries almost subsidiary. Grass Valley Tektronix' TV Products business distortion-free TV signals over products are world leaders. unit and our Grass Valley Group. optical fiber. That is a really fast-growing market. A rapid switchover is going on, in phone-line and other transmission, from copper wire to glass fiber - in new buildings, for instance. Fiber is secure; you can't "bugw it. It is Besides leading in this fast­ immune to electromechanical growing area, GVG is also the interference and radiation. It world's dominant supplier of TV weighs less. It can be more eco­ routing and production switch­ nomical. Best of all, it enables far ers, and special-effects equip­ wider-band transmission, such ment. It had its best year ever as digital signals require. this year. It benefited from a shift in the You wouldn't have known it, GRASS VALLEY GROUP but if you watched space-shuttle Wa~lin~ • fiber optic com­ industry's priorities: Increase landings on TV, you were seeing municat,ons system. purchases of special-effects the 3290 in action, transmitting equipment, which improves signals from NASA to NBC. program quality, interests view­ ers and generates ad revenue (good news for GVG.) But defer purchases of tools (bad news for TV Products, which supplies largely test and measurement things.) The studio needs to switch back and forth from one signal to another without distortions. You'll see the ll0S's handiwork if you watch the 1984 Olympics. One network has placed a large CHART RECORDER for lease-option order with us. Oth­ OF150 fiber optic cable ers are showing similar interest. . ll ,. ,· · . tester is calibrated. Studios like another feature of ___ , Even at that, Television Prod­ the 1105. Most synchronizers ucts had a pretty solid year. will simply cut off when signal ~ r l a&l:l>jil. I • ~I:, Two product introductions quality gets too bad. It's just pos­ -·1 ,_,.- .. ~ were enthusiastically received sible the studio engineers would .... i.-.1 4',lthh. . ,.~·· by the broadcast industry: like to have made that decision • - .....- • d ~. '"""''.. ti'.~, A Clearer Picture of the instead. Now they can; our syn­ - -... _·>··~ Olympics chronizer passes all signals, and In an antique-clock shop, with the studio can decide how bad is 50 clocks going, what you do not •too bad to show." hear are single TICK!s 50 times normal loudness. What you do hear is the cricket sound of 50 Elsewhere in the Commu­ ticks, each a little bit off. nications Division, the spectrum It's like that when TV signals analyzer business continued its from many sources are transmit­ low-key but steady strengthen­ ted to a studio to be merged into ing of Tek's already solid number a program. Each is a little off 2 position. Our high-perform­ from the others. If those time ance portable 492's are very pop­ differences aren't corrected, it ular for military uses, and are the raises hob with the program: choice of the US Air Force and Jerkiness, blacking out of the both US and British Navies. screen, rolling and other things We introduced the SONY/ occur that are viewer-obnoxious. Tektronix 380, a very portable The ll0S frame synchronizer combination instrument: Wave­ is a different sort of product for form monitor, oscilloscope and our TV Products group, in that it vectorscope - a battery-oper­ does signal processing rather ated all-purpose tool for the TV than test and measurement. Its industry. state-of-the-art performance - built around the industry's only Our OF150 fiber-optic cable 10-bit A-to-O converter - out­ shines that of the existing leader: tester has become the standard It enables the signal to pass for much of the telephone indus­ through the synchronizer with­ try. The instrument sends light out leaving a distortion in the down a glass fiber, measures 'its form of a grid or "footprint" on reflected scatter and determines the picture. It is twice as accurate loss of signal fidelity due to cable as competition, allowing an splices. increase in brightness. CAUBKATION OF 1910 digi­ The OF150 exceeded our sales estimates everywhere except The ll0S takes unrelated sig­ Our new 1910 digital (and tal test-signal generator. nals (say, from inside a studio, in This new Tl/ product Japan. It must be modified to analog) test-signal generator is is proving very popular meet that country's standards. a mobile van, off microwave) and showing a very strong early­ in its early stages of coherently times them. It does order rate. One interesting indi­ introduction. so by digitizing the signals, syn­ cation of its value: We have sold chronizing the digits and recon­ it to Canadian customers - verting them to analog TV. against its top competition, a company from Canada - even at a substantial price premium. Our introduction was well timed. A large number of US broadcasters have been upgrad­ ing their ability to transmit Tele­ text, a video magazine. Several features of the 1910 make it ideal for adding Teletext, which is shown on normally unused parts of the TV picture. Each will have a different char­ ter. It may be to look into a tech­ nology that Tek alone wiJI use. Or it may be to develop devices with broad commercial poten­ A CAN-DO BASE tial, then explore the uses the OF TECHNOLOGIES world may have for them. If the venture succeeds, an FORTEK-AND SPU may become a Tek business THE WORLD unit, or part of one. Or it may They're asking too much of turn into a spinoff company, on high technology - "they• being its own or partly owned by Tek. the politicians, the sociologists, If the effort does not pan out, the just plain folks. There's no the participants will rejoin our way that "high tech" can hire TEK-DEVELOPED high­ normal organization. They will everyone else's extra workers. It freauency probe for ICs on have learned new things. Not is not guaranteed to prevent (or wafers (above) enables the least of them will be general­ measurements up to manager skills, of which we are win) World War III. It has a very 18GHz, making it the fast­ slight chance of creating Utopia. est wafer probe in exis­ short at the moment. It may not even cure the com­ tence. (Close-up at left.) We'll describe for you in these mon cold. pages five distinct aspects of The well-publicized belief that Tektronix technology - a "can­ it will do some or all of these do" sampler: things is caused by the many A dramatic way to shortcut impressive things it has shown it the design of integrated circuits; can do. a shutter that can help a black­ and-white TV tube produce a multi-color image; a television tube so bright you could sit in Our Technology Group pro­ the sun and watch it; a process vides a broad base and deep that can quintuple the speed of well of R&D "can do." It is !Cs; and a joint venture with ex­ increasingly evident in our new employees to produce a display products. device that does what a CRT To spread its use within does but is less than an inch Tektronix, our research people thick. are moving out into our divi­ sions with tools and training to Monochrome Blossoms help engineers there learn in Color advanced methods. What you see on the CRT We are also looking into ways screen is a display in vivid col­ to export technology to the ors. The image is knife-sharp. world at large, other than inside The contrast is very high, almost Tektronix products. unaffected by the room light. You can quickly get broke and Interestingly, the display is TRAINING AND tools for ragged if you shag every inter­ IC designers are provided not on a color tube at all, but on a for each of our divisions esting investigative idea. To be standard monochrome CRT. by our R & D staff. able to pursue more of the Bringing color out of no-color promising ones, we will form may seem like alchemy, but it a Tek organization whose char­ isn't. It's not even new; rainbows ter will enable us to take part do it routinely. Now, so can Tek. in joint-venture and spinoff companies. Another way to benefit both outsiders and ourselves from our knowhow is through forma­ tion of Strategic Program Units. They are much like Tek business units, but even more like small businesses of their own, free of some of our operating restraints. As the yellow light from the phosphor shines through it, the first polarizing filter transmits half the red portion and aligns it vertically. (It may help to think of it as an up-and-down venetian Our new liquid-crystal color blind-but only up to a point; to shutter display system, an­ !he rest of the incoming light, it 1s transparent, like a window.) nounced this spring, is built on Next the light passes through The next filter performs the five bits of knowledge: the liquid-crystal shutter, to a sam~ operation on the green 1. What we see as white light third polarizer, a neutral one portion of the light, only align­ is really a mixture of all the called an analyzer. It is oriented ing it horizontally. colors. vertically, and will transmit to 2. Filters can transmit some The pair of "venetian-blind" the viewer whichever color can colors, block others. filters now has sorted out the be aligned that way. yellow light into two manage· LIQUIO·CRYSTAL color 3. Light waves can be polar­ shutter enables high­ The job of the shutter is to ized-that is, lined up in an able color components, ver­ resolution vivid-color dis• optically "rotate" the two filtered tically polarized red and hori­ orderly fashion along any plays from a monochrome colors so each can pass through axis you have in mind. zontally polarized green. CRT. Shutter explanation in will the bottom photo was the analyzer. It do this very 4. Liquid crystals can bend, or taken from an LC color­ fast; the viewer's eye, too slow to rotate, polarized light. s~utter display. The printed catch on to what's happening, 5. The human eye is quite picture cannot capture the mixes the red/green components slow at reacting to light full brightness and contrast of the actual display. and recreates the color being going on and off. written on the screen. That color Our color shutter, combining can range from full red through CRT and bquid-crystal technol­ yellow to full green, depending ogy, is now available for com­ on relative beam current used. mercial use. That will include our Our shutter cell contains use; the color shutter offers the many longish liquid-crystal mol­ first practical means of obtaining ecules. They tend to lie parallel color displays on small instru­ to the two glass "alignment'' ments. Interest in the scientific layers. When an AC voltage is and technical community has applied, the molecules rotate 90 been strong. We're now "troll­ ~egrees - toward the incoming ing" to see what a range of uses light. When the voltage is turned the rest of the world may have off, the molecules relax toward for this unique color system. their normal alignment. This How it Works, and Why switching enables first the red The shutter package is a sand­ then the green polarized light to match the analyzer's, and be wich within a sandwich. The inner one comprises a center of transmitted. While the shutter is liquid-crystal molecules con­ in one position, the CRT writes tained by two clear layers of !he gree~ (or green-containing) glass. That sandwich is itself information on the screen; in the other shutter position, it writes packed between a neutral polar­ izing filter behind and two color the red portions. polarizing filters (one red, one Liquid-crystal shutters were green) in front. formerly too slow for this kind The whole assembly fits of job. Those in digital wrist­ watches switch only five to 10 neatly onto the front of a CRT so the screen light shines through times a second. Even fancier it. The CRT we chose has a phos­ ones have been limited in speed phor that appears yellow (actu­ because the inner molecules take ally a mix of red and green) and so long to settle down after the switch is turned to "off." is very bright. Tek solved this problem, That brightness is needed, since the CRT gun must divide partly by meticulously fixing the its time, share the light. It will aligning molecules' angle. That write each screenful of informa­ has provided a molecular array free of "bounce" and a cleaner, tion twice, once for things that much faster switch - one to will be or contajn red, the other time for green. three milliseconds. A New Approach to Displays Tektronix and a group of for­ mer employees have jointly ii:i­ vested in a company that will develop and build electrolum­ inescent (EL) flat-panel displays. Tektronix has taken a minor­ ity position as a preferred share­ holder in Planar Systems, Inc., in exchange for rights to Tek­ Many Doors (Windows?) developed EL technology. Opened Using that technology, Planar Liquid-crystal color-shutter will build flat-panel displays displays can offer many advan­ intended for military and tages. A big one is that they are commercial information termi­ barely affected by room light and nals and personal computing glare. First, the ambient light, to products. get to the CRT screen, must pass Flat panels, as cathode-ray through the filter sandwich, tubes do, produce an image on a which removes most of it; then, sensitive phosphor screen. as what's left of it reflects back off Unlike CRTs, these panels are the screen, it passes through and solid-state. They're also shallow, is reduced by the filter packet only ¾ inch thick, and that once more. includes all the electronics. They FLAT-PANEL displays of Another inherent advantage will be useful in products where Naveform, alphanumeric is a sharp, high-resolution flatness, compactness or por­ State Research Lab. He will con­ and graphic information image. In color tubes three tability is important. tinue as consultant to Tek on are a Tektronix technology The flat panels are matrix­ that will be put to broader beams (red, green, blue) must other research projects. use. Planar Systems, Inc., precisely overlap. There is add ressed; the visible image Executive Vice-President Bill a group of fom,er Tek always some misalignmen~, occurs when an AC voltage is Walker says the joint investment employees, will manufac- causing incorrect color, or fuzzi­ applied across a tightly-spaced is a unique approach in pursuing ure the product. Tek is a shareholder. ness, or both. The LC image grid. It strikes a selected pattern new technology. We have no requires only one beam, and can of X-Y coordinates, exciting present plans to use flat panels be as sharp as the gun quality the electrons imbedded in the in our products, so we have allows. phosphor and causing them to chosen not to manufacture Liquid-crystal color also can light up. them. offer cost advantages. James M. Hurd, Planar presi­ But the technology has excel­ This shutter is equally able to dent, was manager of our Solid lent market potential. This way work with raster (TV-type) or ,ve can participate in that po­ refreshed vector (osci lloscope­ tential without financing the type) tubes. There has been no manufacture. practical way to do the latter up And, if the displays do fit into to now. future Tektronix products, we Some likely uses may be com­ have a potential US supplier. puter work stations, where color Jim expects to be able to pro­ tubes often have not offered high duce the panel displays some­ enough resolution; word-pro­ time between spring and fall of cessing displays, where color 1984. The company is setting has been either impractical or too up a manufacturing plant near costly; and small displays for Portland. In the meantime, process control, such as those on Planar will use the prototype fa­ vacuum systems, which now cijjty at Tek where the product may include color to highli&ht was developed. warnings or other special messages. The shutter is a first for Tek, in that we are marketing a technol­ ogy to see what uses the techni­ cal community can put it to. For us, the first applications will be in small instruments, such as oscilloscopes and spectrum analyzers. You Can Lead an Engineer to Silicon Gallium arsenide circuits are To nudge more Tek design fabricated like silicon !Cs. The engineers to move from etched only difference is the base mate­ circuits to silicon ICs, our rial. But, when it comes to high research organization is offering device speed, what a difference! our divisions both design tools Since electrons move through and training. The tools include gallium arsenide more freely, we IC design guidebooks, com­ can produce GaAs !Cs that are But, beyond that, we see a puter-aided design programs, much faster than those of silicon. wider opportunity to benefit #quick chips," gate arrays and There are trade-offs; so this from our leadership in this tech­ cell libraries. approach has no leftover ele­ material won't replace silicon. nology. We will form a Strategic Normally it takes 12 to 18 ments and uses chip space effi­ But for h igh-frequency ICs Program Unit to pursue the idea months to design and produce a ciently, cell libraries can be used such as many Tek instruments of outside sales of custom custom IC. Quick chips, gate for intricate, high-density cir­ demand, GaAs provides the devices. That will serve two pur­ arrays and cell libraries cut the cuitry, several thousand parts on performance we need. poses: (1) Help us fund the pro­ design and manufacturing a chip. Tek will use them to advan­ duction program, and (2) by down to three or four months. We're using all these devices tage - not just in on-off circuits enabling broad innovative use These short-cut design tools in our products to let us respond but also in fast analog-to-digital of gallium arsenide, keep us in vary from simple to very faster to the market. That's converters. the forefr6n t. complex. important in these competitive The simplest is the quick chip, times. a group of proven parts on a piece of silicon. Everything is Gallium Arsenide: completed except for the final A Faster Track for step that interconnects which­ ever parts the designer wants to Electrons Pushing the state of the art in use. A quick chip is a fast turn­ around tool for a simple design, many Tek products means pro­ ducing ever-faster devices. In 50 parts or fewer. As with an our search for speed, we have erector set, there are generally developed a leading national unused parts. position in gallium arsenide A gate array on silicon (or, (GaAs) research and soon, gallium arsenide) is a simi­ lar but more complex design development. tool. It is a chip with an orderly The potential of this com­ pound (a crystal material like the arrangement of up to 500 logic element silicon, only a semi­ gates - transistors grouped as on-off switches. The multi­ insulator rather than a semicon­ ductor) has been long known. layered array is complete except It for the metallization layer that took recent emergence of reliable base-material supply to make will provide the circuitry con­ nections among the gates. The GaAs devices a reality. designer adds that last layer to give the chip its unique perform­ ance. Like the quick chip, the gate array usually has unused elements. The cell library, however, has no leftover parts. Our most sophisticated fast-design approach, the "library" (stored as software in a computer mem­ ory) contains "cells"- groups of gates - already connected to form different kinds of logic functions. On a chip, these cells are linked into complex custom­ ized groupings. Because this

PHOTO-LITHOGRAPHY for gallium-arsenide IC fabrica­ tion attains standards that put us at the forefront of this advanced technology. A CRT for Daylight Use You'd have trouble watching color TV in the full daylight. The sunshine would wash out much of the picture. But the new Tektronix T-8100 CRT is so bright you could view the image even in the direct sun. That's whv it was built-to be THE BRIGHT daylight used in the' daylight, in open would wash out most color cockpits \,vith the sky coming in. displays, but the Tek T8100 The tube was developed CRT produces a highly visi­ ble image. It will be used under contract to Sperry Flight at first tn avionics. Systems, Phoenix, for aviation applications. However, we will begin to manufacture the tubes for sales to other customers fuel efficiency, air maps . .. Video The T-8100 has a flat-faced tube beginning in March. displays, on the other hand, pre­ - and the domed shadow mask The tube has 10 times the sent many layers of information is replaced by a flat one also, that brightness of and greater reso­ at once, clearly delineated by is pulled taut by mechanical lution than conventional color colors. stressing on all sides. Beam cur­ CRTs. It works in both vector It was Boeing Company, in rent now causes localized heat­ (point-to-point lines) and raster its new 757 and 767 jets, that ing, which merely relieves some (television-type) displays. showed the value of on-board of the stress. But the holes stay Information required to fly color displays of ffight informa­ put, the beam strikes the phos­ modem aircraft has increased in tion; two people instead of three phors properly and the colors volume and become much more can handle the cockpit. But the are precisely correct. complex. Older methods of indi­ CRT screens had to be sheltered Besides the brightness the cation and display (gauges, from sunlight so as not to lose taut-flat mask allows, our use of altimeters, servo-mechanisms) the important color distinctions closely spaced triads in the mask have grown less and less useful. between information. enables exceptional visual reso­ For one thing, they crowd the Shielding is easy enough in a lution. Even when squinted at control panel; another, they commercial plane. But military from close u p, diagonal lines show information separately users don't have that option, appear as diagonal lines, not the that ideally should be correlated: often having to view the dis­ stair-step of dots typical of other Rate of climb, attitude, altitude, plays in open cockpits. So a far CRT displays. ground and air speed, direction, brighter tube was needed. The tube has a 5x5-inch view­ In a conventional CRT, beam able area. We've been contracted cu rrent from the three color to build a 6x6-inch model guns passes through triads of also, which we will market in ho les in a d omed "shadow" spring. We're also prepared to mask that fits right behind the develop other display devices phosphor screen. Increasing the for avionics. current increases the brightness; but that overheats the mask. It sags; the holes move out of position, which distorts the mask-phosphor regis tration. The result is lack of color purity. The Worlds Best Circuit Boards The best etched-circuit-board manufacturing plant there is, is Tektronix' new facility at Forest Grove, Oregon, which started up in January. It stacks up well against known industry standards. It's probably the most computerized such ope~a­ NOBODY IN THE picture at Forest Grove? Thats the tion in existence. That plus automated material way it often is at our highly handling and state-of-the-art process systems give automated circuit-board us a great advantage in technology, quality, cost plant. Here, an unmanned delivery cart responds and time-to-market. to a computer command, Circuit boards are building blocks of almost all guided by an electrical Tektronix products. They not only are the base for circuit in the floor. Below, circuit boards move along inserted components but also provide the perhaps untouched by human thousands of feet of electrical interconnections hands. within the instrument. Onto the copper-dad epoxy-glass board, pho­ tographically produced electrical paths are printed; the unwanted copper portions are etched away. This process in Tek instruments involves very advanced technology. Our ECBs range from sim­ pler single boards up to densely packed, very intri­ cate 10-layer laminated "sandwiches." They demand increasingly fine-line electrical paths to Other things are done differently at Forest Grove accommodate today's microcomponents, and also. Suppliers may now feel they have somehow tomorrow's. become part of our company. Our new 174,000-square-foot plant is set up to Tektronix owns no materials, maintains no produce the world's highest-quality, highest-tech­ inventory and has only minimal in-house storage. nology boards, at the lowest cost. Material belongs to the supplier, who does the The plant contains, almost entirely, new state-of­ warehousing nearby. We have it on consignment, the-art process equipment from the finest sup- and pay for it as it is used. pliers in the world. . . Each supplier has an "exclusive"; that is, it is our Automated equipment spells product1v1ty sole vendor for that material so long as our stan­ increase. Our Beaverton ECB operation, with 700 dards are met: To be the world's best. Suppliers are people, produced 500,000 square feet of circuit chosen on no single basis, but a varying mixture of board per year. The new plant is run by 400 people cost, reliability, quality, R & D capability and will­ - and eventually will tum out 1,600,000 square ingness to provide service. feet per year. The "all or nothing" approach has encouraged In general, the move has meant upgrading jobs high quality and prompt delivery and service. ~d to a higher technical level. Gone are the grunt-level suppliers like it. Knowing our weekly or d~1ly tasks, like hand loading and unloading of process requirements ahead of time enables good planning lines. and inventory management. Production of the state-of-the-art circuit boards began at Forest Grove in January. Because of lowered demand for that component, plans to shut down the Beaverton ECB plant were telescoped. We'd planned to end production there in six months; we shut it down instead in six weeks. With the lead-footed US economic recovery, we have excess capacity. But, luckily, high-quality cir­ cuit boards are a very marketable item. So, just for a time, we will sell our excess production to national manufacturers of computers and relate d equipment. service center supervisor, then sales engineer at our Chicago center, and sales engineer at Houston. Then he came to Beaverton and progressed through a range of increasing responsibility in service-management jobs. • Fred Hanson, 44, manager of our Portable Oscilloscopes business unit since March, 1983, came to us from Hewlett-Packard Company, where DR. F. PAUL CARLSON DR. DONALD O. PEDERSON he had 20 years of diverse experience in manage­ ment of both technical and manufacturing groups. Most recently, he was general manager of H-P's Board Adds Two Members Corvallis, Oregon, Personal Computation Group, Tektronix' board of directors added two mem­ which designs and produces calculators. He was bers in June 1983: R & D manager there from March, 1978 until April, • Dr. F. Paul Carlson, 46, is president and chief 1981. Other responsibilities with H-P included executive officer of Oregon Graduate Center, a manufacturing management jobs at Corvallis and postgraduate education and research institution at Loveland, Colorado. near Portland. Dr. Carlson is a director of Pacific • Dave Friedley, 44, has been a Tektronix Power & Light Company, Servo-Motor Technology employee since March, 1974, when he joined us Corporation and Emanuel Hospital, Portland; and as marketing manager for Frequency Domain a trustee of Pacific Lutheran Theological Seminary, Instruments. Berkeley. Before that time he had worked nine years with • Dr. Donald 0. Pederson, 58, is a professor of Genrad lnc. in marketing, sales and management electrical engineering at the University of Califor­ positions, including managing its Hjgh Frequency nia, Berkeley, where he has served on the faculty Equipment group from January, 1971 to 1974. since 1955. He is recognized as a world leader in At Tek, he has been Frequen cy Domain computer-aided design technology. Dr. Pederson Engineering manager and the executive vice presi­ was a Guggenheim Fellow, received the 1969 IEEE dent of The Grass Valley Group, Inc., our California Education medal, and was elected to the National subsidiary. Academy of Sciences in 1982. Four Vice-Presidents Chosen Four vice-presidents were appointed by Tektronix board of directors during the year. • Peter Strong, 42, has had 20 years experience with Tektronix. He began as maintenance manager for Tektronix Australia Pty. Ltd. in 1963, then was field engineer for that subsidiary. After two years on loan to the Tek distributor for Southeast Asia, he returned as staff engineer at Beaverton, then pro­ gressed through a variety of responsibilities for Tektronix and Tek Australia. Among them were fonning a group to exploit the possibilities of micro­ processor development aids as a Tek product; and serving as general manager for our New Ventures group. PETER STRONG STAN KOUBA He became general manager of our Data Com­ munication Analyzers and Logic Analyzers busi­ ness units in 1979, serving in that capacity until September of the past year. Then he became gen­ eral manager of our Design Automation Division. • Stan Kouba, 52, is Corporate Service and US Field Support manager, responsible for our acclaimed service program. He has held that responsibility since 1982. Before that, Stan held a variety of service-related jobs with Tektronix. He joined us in 1960 as techni­ cian at our Washington, D.C. service center, was

FRED HANSON Tektronix, Inc.

CORPORATE OFFICE: EUROPEAN OPERATIONS: The Grass Valley Group, Inc. Beaverton, Oregon Tektronix Europe B. V. Amstelveen, The Netherlands MANUFACTURING: UNITED STATES Tektronix Limited Grass Valley, California MANUFACTURING: Guernsey, Channel Islands Beaverton, Oregon EUROPEAN OPERATIONS: Forest Grove, Oregon INTERNATIONAL G. V.G. International Ltd. Portland, Oregon MANUFACTURING: Winchester, United Kingdom Redmond, Oregon *SONY/ Tektronix Corporation Vancouver, Washington Tokyo and Gotemba, Japan UNITED STATES WiJsonvilJe, Oregon Tektronix Guernsey Limited SALES AND SERVICE: Guernsey, Channel Islands Arden Hills, MN Fort Worth, TX UNITED STATES Tektronix Holland N. V. Atlanta, GA Palo Alto, CA SALES AND SERVICE: Heerenveen, The Netherlands Edison, NJ Woodland Hills, CA Albany, NY New Orleans, LA Tektronix U.K. Limited Elkhart, IN Albuquerque, NM Newport News, VA Hoddesdon, United Kingdom Atlanta, GA Oklahoma Gty, OK Tektronix, Inc. Purchasing Office Baltimore, MD Orlando, FL Tokyo, Japan V-R Information Systems, Inc. Boston, MA Pensacola, FL Austin, Texas Chicago, fl Philadelphia, PA Cleveland, OH Phoenix, AZ INTERNATIONAL Concord, CA Pittsburgh, PA SALES AND SERVICE: Australia - Tektronix Australia Pty. Limited, Dallas, TX Portland, OR Sydney, Adelaide, Brisbane, Canberra, Dayton, OH Poughkeepsie, NY Melbourne and Perth Dem·er, CO Raleigh, NC Austria - Tektronix Ges.mbH, Vienna Detroit, t,.1] Rochester, NY Belgium-Tektronix S.A., Brussels Fort Lauderdale, FL St. Louis, MO Brazil - Tektronix lndustria e Comerdo Ltda., Houston, TX St. Paul, MN Sao Paulo and Rio de Janeiro Huntsville, AL Salt Lake Gty, UT Canada - Tektronix Canada Inc., Barrie, Indianapolis, IN San Antonio, TX Calgary, Edmonton, Halifax, Montreal, Irvine, CA San Diego, CA Ottawa, Toronto, Vancouver and Wmn.ipeg Kansas City, KS Santa Clara, CA Denmark-Tektronix NS, Copen.hagen Knoxville, TN Seattle, 'WA Finland - Tektronix Oy, Helsinki Long Island, NY Syracuse, NY France- Tektronix, Paris, Aix-Les-Milles, Los Angeles, CA Washington, DC Lyon, Nanterre, Rennes, Strasbourg and Milford, CT Woodbridge, NJ Toulouse Germany-Tektronix GmbH, Cologne, AMERICAS-PACIFIC Berlin, Hamburg, Karlsruhe, Munich, OPERATIONS: Nuremberg Tektronix, Inc. Ireland-Tektronix U.K. Limited, Dublin Beaverton, Oregon Italy- Tektronix S. p. A., Milan, Rome and Turin Japan - 'SOl\TY/Tektronix Corporation, Tokyo, Fukuoka, Nagoya, Osaka, Sendai and Tsuchiura Mexico-"Tektronix S.A. de C.V., Mexico Gty The Netherlands-Tektronix Holland N.V., Badhoevedorp Norway-Tektronix Norge NS, Oslo Spain-Tektronix Espanola S.A., Madrid and Barcelona Sweden - Tektronix A. B., Stockholm and Gothenburg Sv:itzerland-Tektronix International A.G., Zug and Geneva United Kingdom-Tektronix U.K. Limited, London, Harpenden, Livingston, Maidenhead and Manchester

•Joint Venture Companies Tektronix experienced a decline in the demand for its products during the past fiscal year. Increased competition in certain product lines and a depressed world economy contributed to this decline in order volume. Weakness in foreign currency exchange rates against the dollar also contributed to the downturn in the Company's business in foreign markets, which were, on the whole, somewhat weaker than the domestic market. Since its founding in 1946, the Company has played a significant role as a supplier of products contributing to the advancement of science and technology. Management views the principal focus for the future of the Company as that of a broad-based supplier of products in this field, and believes Tektronix' future strength depends to a large extent on the successful development and introduction of innovative new products. Inflation has had a significant effect on the Company's materials and labor costs as well as on the total amount invested in recent years in new plant and equipment. These factors, which were evident to a lesser extent in the most recent year under review, combined with an unfavorable economy and increased competition to limit the Company's ability to counteract higher costs and expenses with price increases. As a result, margins have decreased over the period covered by this review. The accounting view of inflation is set forth in the Notes to Financial Statements. The comparison of 1983 financial results to those of prior years is affected by the adoption by the Company this year of Financial Accounting Standard No. 52 to account for the effects of foreign currencies. The financial information for prior years has not been restated to reflect this method. Financial Condition - Management believes that Tektronix' financial condition positions the Company well for the future, with substantial internal cash flows as well as the capability to seek additional funds from outside sources. 1979 1980 1981 1982 1983 (in thousands) $275,652 $347,086 $359,264 $ 388,714 $ 442,252 Working capital 642,907 841,693 953,753 1,042,287 1,087,414 Total assets 28,997 45,809 50,175 66,334 33,675 Short-term debt 62,094 136,196 146,143 132,060 152,342 Long-term debt 402,800 483,338 557,544 630,449 661,695 Shareowners' equity Tektronix' working capital has varied between thirty-three percent and thirty-seven percent of net sales for the past three years. A substantial portion of current assets is represented by short-term investments overseas. The accounts receivables total, as a percentage of net sales, was 19.3 percent in 1981, 19.3 percent in 1982 and 17 .7 percent in 1983; inventories were 27. 7 percent of net sales in 1981, 24.3 percent in 1982 and 24.6 percent in 1983. Current liabilities remained at a constant level (approximately 20 percent) relative to sales for 1981 and 1982, but declined to 16.6 percent in 1983. Total assets have increased as a result of substantial capital investments in technically advanced buildings and equipment. Expenditures in these categories in 1981 were $114.1 million; in 1982 and 1983, the amounts were $102.4 million and $93.3 million, respectively. Management expects that capital spending will continue at comparable levels in 1984 and 1985. The costs to complete facilities projects authorized at year-end 1983 is estimated to be $58 million. The Company's expanding asset base has been financed largely by funds generated from operations; $121.9 million in 1981, $144.7 million in 1982, and $141.9 million in 1983. These internal funds have been supplemented with external borrowings and the sale of shares to employees. Management anticipates that funding needed to fulfill the Company's capital commitments will be provided from these same sources and from other sources as appropriate. The Company currently maintains $115 million in long-term bank lending commitments and had $81 million of unused short-term credit lines at fiscal year-end. Short-term borrowings and maturing long-term debt increased $4.4 million in 1981 and $16.2 million in 1982, but decreased by $32.7 million in 1983, when the Company's $35 million principal amount of eight-year notes matured. Long-term debt was up $9.9 million in 1981, down $14.1 million in 1982, and then increased in 1983 by $20.3 million. The ratio of total debt to invested capital has declined from 26.0 percent in 1981 to 21.9 percent in 1983. Shareowners' equity was reduced by a $12 .4 million charge during 1983 resulting from the Company's adoption of Financial Accounting Standard No. 52. Results of Operations-Fiscal year 1983 was characterized by a slight decline in sales- the Company's first such decline since 1971 - and substantial declines in operating income and earnings from the prior year. Management attributes the sales decline to the decline in customer orders for the year. Customer orders declined more sharply than sales in 1983, falling 8 percent, while net sales declined less than 1 percent. Order volume for the year represented a sharp change in trend from 1982, when order volume increased 17 .4 percent over 1981. Management attributes this change to the economic environment, reduced orders from OEM customers (primarily OEM customers of the Information Display Division), competition, the effects of weakness in foreign currency rates against the dollar, and the timing of new product introductions by the Company. These factors were offset in part by an increase in demand for Design Automation Division products. Manufacturing cost of sales continued to increase as a percentage of net sales. Cost of sales was 48.3 percent of sales in 1981, 49.8 percent in 1982, and 51.7 percent in 1983. Under-utilized manufacturing facilities, owing to the lower than anticipated demand, and increased indirect labor costs contributed to the manufacturing cost increases. Increased inventory obsolescence expense also contributed to higher manufacturing costs in 1983. This increase resulted in approximately $15.3 million of additional cost of sales compared with the prior year. 1979 1980 1981 1982 1983 (in thousands, except per share amounts) $786,936 $971,306 $1,061,834 $1,195,748 $1,191,380 Net sales 121,448 147,849 138,036 146,447 114,455 Operating income 77,151 85,072 80, 167 79,453 48,714 Earnings 4.28 4.66 4.34 4.25 2.57 Earnings per share .60 .79 .90 .98 1.00 Dividends per share The Company has continued its program of investment in facilities and improved manufacturing systems. As a result, depreciation expense, based on accelerated methods, has grown from 2.7 percent of sales in 1979 to 5.6 percent in 1983. This added charge affects both cost of sales and operating expenses. Operating expenses have remained relatively constant as a percentage of sales for the last three years, ranging from 38.0 percent to 38.7 percent. Selling and engineering expenses have increased as a percentage of net sales each year since 1981. Engineering consumed 10.5 percent of net sales in 1983, compared with 9.1 percent in 1982 and 8.6 percent in 1981. Selling expenses went from 14.8 percent of net sales in 1981 to 15.1 percent in 1982 and 15.6 percent in 1983. Administrative expenses were 9. 5 percent of net sales in 1981, 9.1 percent in 1982 and 10.1 percent in 1983. These operating expense increases in 1983 were due primarily to lower than anticipated sales levels and the impacts of divisionalization. Profit sharing expense, which varies generally with income levels, has declined for more than three consecutive years. It represented only 2.5 percent of net sales in 1983, compared with 4.6 percent in 1982 and 5.8 percent in 1981. Interest expense decreased by 12.5 percent in 1983 because of lower rates and reduced borrowings. Non-operating losses in 1983 of $25.5 million represent a substantial negative change from non-operating income of $9.5 million in 1982 and $19.6 million in 1981. The primary factor influencing non-operating income and expense in 1983 was a $30.5 million charge against earnings representing the actuarial cost of the Company's early retirement opportunity program, recognized in the third fiscal quarter of the year when the program was adopted. Income tax expense decreased substantially in 1983, primarily as a result of reduced taxable income. Earnings declined by 38.7 percent in 1983, following a decline of one percent in 1982. This decline reflects primarily the charge against non-operating income discussed above; the increased cost of sales and operating expenses; and to a small extent the decline in business volume. These factors were offset in part by the decline in income tax and profit sharing expense for the year.

To the Shareowners of Tektronix, Inc.: We have examined the statements of consolidated financial position of Tektronix, Inc. and subsidiaries as of May 28, 1983, May 29, 1982, May 30, 1981, May 31, 1980, and May 26, 1979, and the related statements of consolidated income and reinvested earnings and of consolidated changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing pro­ cedures as we considered necessary in the circumstances. In our opinion, such financial statements present fairly the financial position of the companies at May 28, 1983, May 29, 1982, May 30, 1981, May 31, 1980, and May 26, 1979, and the results of their operations and the changes in their financial position for the years then ended, in conformity with generally accepted accounting principles consistently applied during the period except for the change, with which we concur, in 1983 in the method of accounting for the effects of foreign currencies as described in the notes to the financial statements.

Portland, Oregon August 1, 1983 1979 1980 1981 1982 1983

$428,787 $540,917 $573,791 $621 ,981 $639,680 CURRENT ASSETS are cash and assets that should be converted to cash or used in operations within one year 41,788 57,145 47,862 73,331 96,867 CASH AND CASH EARNING INCOME - bank deposits and short-term investments 153,568 198,069 204,952 230,573 210,843 ACCOUNTS RECEIVABLE - due from customers after an allowance for doubtful accounts 214,533 263,563 293,705 290,268 292,885 INVENTORIES-materials, accumulated manufacturing costs and finished products awaiting sale 18,898 22,140 27,272 27,809 39,085 PREPAID EXPENSES - supplies and services that have not been used, and deposits that will be refunded 153,135 193,831 214,527 233,267 197,428 CURRENT LIABILITIES are obligations that are to be paid within one year

28,997 45,809 50,175 66,334 33,675 SHORT-TERM DEBT -borrowed for less than one year and that portion of long-term debt payable within a year 42,033 49,034 60,405 63,856 78,569 ACCOUNTS PAYABLE- owed for materials, services, interest and miscellaneous taxes

20,444 27,404 28,788 23,118 15,280 INCOME TAXES PAYABLE - to United States and foreign governments 61,661 71,584 75,159 79,959 69,904 ACCRUED COMPENSATION - parable to employees, and their retirement and incentive pans 275,652 347,086 359,264 388,714 442,252 WORKING CAPITAL is the current assets in excess of the current liabilities 194,454 276,771 340,912 379,122 397,290 FACILITIES - the cost of land, buildings and equipment after deducting accumulated depreciation 19,666 24,005 39,050 41,184 50,444 OTHER ASSETS - the equity in joint ventures, receivables not due within a year, and intangibles 62,094 136,196 146,143 132,060 152,342 LONG-TERM DEBT - funds borrowed for more than a year, less that portion due within a year 19,150 23,974 30,765 41,124 43,691 DEFERRED TAX LIABILITY - income taxes which have not become payable 5,728 4,354 4,774 5,387 32,258 OTHER LIABILITIES - incentive compensation and early retire- ment expense payable in future years 402,800 483,338 557,544 630,449 661 ,695 SHAREOWNERS' EQUITY is the book value owned by the shareowners. 31,950 41,844 52,515 64,277 78,097 SHARE CAPITAL- the proceeds of common shares sold less the cost of any shares repurchased 370,850 441,494 505,029 566,172 595,957 REINVESTED EARNINGS - accumulated earnings that have been reinvested in the business (12,359) CURRENCY ADJUSTMENT - accumulated translation adjust- ment of foreign subsidiary financial statements 18,143 18,372 18,574 18,807 19,059 COMMON SHARES- the number of shares outstanding a~ear- end, of the forty million no par value shares authorize The accompanying notes are an integral part of these financial statements. 1979 1980 1981 1982 1983

$786,936 $971,306 $1,061,834 $1,195,748 $1,191,380 NET SALES and rentals to customers for products, replacement components and services

359,740 458,464 513,145 595,340 615,941 COST OF SALES - the materials, labor and facilities related to manufacturing goods and providing services

427,196 512,842 548,689 600,408 575,439 GROSS INCOME remaining from sales revenue after produc- tion costs

60,561 77,797 91,147 109,086 125,393 ENGINEERING EXPENSE- for research and the development of products and components

113,461 135,405 157,105 180,631 185,355 SELLING EXPENSE-for marketing and sales programs, and the distribution system

68,044 88,343 100,715 108,977 120,920 ADMINISTRATIVE EXPENSE - for general management and supporting services

63,682 63,448 61,686 55,267 29,316 PROFIT SHARING - the incentive portion of employee compensation

121,448 147,849 138,036 146,447 114,455 OPERATING INCOME remaining from sales revenue after the costs and expenses of operations

6,428 15,956 25,274 29,537 25,832 INTEREST EXPENSE-the cost of borrowed funds and banking services

11,631 5,029 19,630 9,493 (25,509) NON-OPERATING INCOME (EXPENSE) - investment income, joint venture earnings, and other income and expense

126,651 136,922 132,392 126,403 63,114 INCOME BEFORE TAXES remaining from sales revenue after operating costs and expenses an non-operating items

49,500 51,850 52,225 46,950 14,400 INCOME TAXES-provided for income related taxes levied by United States and foreign governments

77,151 85,072 80,167 79,453 48,714 EARNINGS remaining from sales revenue for reinvestment in the business and for dividends

302,364 370,850 441,494 505,029 566,172 REINVESTED EARNINGS-from prior years

(8,665) (14,428) (16,632) (18,310) (18,929) DIVIDENDS-declared for payment to the shareowners

370,850 441,494 505,029 566,172 595,957 REINVESTED EARNINGS at year-end

18,031 18,264 18,482 18,691 18,937 AVERAGE SHARES - weighted for the number of common shares outstanding during the year

$4.28 $4.66 $4.34 $4.25 $2.57 EARNINGS PER SHARE-the earnings allocated to each of the weighted average common shares outstanding

.60 .79 .90 .98 1.00 DIVIDENDS PER SHARE-received by the shareowners

The accompanying notes are an integral part of these financial statements. 1979 1980 1981 1982 1983

$96,385 $117,472 $121,934 $144,690 $141,886 FUNDS FROM OPERATIONS

77,151 85,072 80,167 79,453 48,714 EARNINGS

21,258 30,303 42,228 56,473 66,710 DEPRECIATION EXPENSE

(5,145) (2,727) {7,252) (1,595) (2,423) JOINT VENTURE EARNINGS-NET

3,121 4,824 6,791 10,359 2,567 DEFERRED INCOME TAXES

26,318 UNFUNDED EARLY RETIREMENT

44,598 89,230 10,598 (2,754) (13,258) NET FUNDS FROM FINANCING

18,646 16,812 4,366 16,159 (30,635) SHORT-TERM DEBT

(1,097) (652) (20,717) (35,694) (2,961) LONG-TERM DEBT DUE WITHIN YEAR

28,096 77,604 32,910 23,329 25,447 LONG-TERM DEBT ADDITIONS

7,618 9,894 10,671 11,762 13,820 SHARE CAPITAL

(8,665) (14,428) (16,632) (18,310) (18,929) DIVIDENDS

(165,403) (191,345) (141 ,815) (116,467) (105,092) OTHER CHANGES IN FINANCIAL POSITION

(38,468) (44,501) (6,883) (25,621) 19,730 ACCOUNTS RECEIVABLE

(51,010) (49,030) (30,142) 3,437 (2,617) INVENTORIES

(6,025) (3,242) (5,132) (537) (11,276) PREPAID EXPENSES

8,925 7,001 11,371 3,451 14,713 ACCOUNTS PAYABLE

1,986 6,960 1,384 (5,670) (7,838) INCOME TAXES PAYABLE

16,022 9,923 3,575 4,800 (10,055) ACCRUED COMPENSATION

(100,349) (115,926) (114,065) (102,410) (93,325) FACILITIES EXPENDITURES

(12,359) CURRENCY ADJUSTMENT

3,516 (2,530) (1,923) 6,083 (2,065) OTHER ITEMS

(24,420) 15,357 (9,283) 25,469 23,536 CHANGES IN CASH AND CASH EARNING INCOME

The accompanying notes are an integral part of these financial statements. Principles of Consolidation- The consolidated financial statements include the accounts of Tektronix, Inc. and its wholly owned subsidiaries (the Company) since dates of organization or acquisition. All material intercompany transactions and balances have been eliminated.

Joint Venture Companies- Investments in joint venture companies, where the Company holds fifty percent or less of the share capital, are stated at cost plus the Companys equity in their reinvested earnings. All material intercompany income has been eliminated.

Foreign Currencies -Prior to 1983 foreign affiliate monetary assets and liabilities were translated into United States dollars at the period-end rate of exchange, while other assets and liabilities were carried at their historic values. Income was translated at average exchange rates. Translation gains and losses were included in non-operating income. Foreign manufacturing operations, and sales operations in highly inflationary economies, continue to use this translation method. Beginning in 1983 most foreign sales operations financial statements are translated into United States dollars at current rates of exchange with changes in exchange rates reflected in the currency adjustment to shareowners' equity. Transaction gains and losses are included in non-operating income.

Inventories- United States inventories are stated at the lower of market or cost, with cost determined on the last-in, first-out basis (LIFO). Foreign inventories are stated at the lower of market or cost on the first-in, first-out basis (FIFO).

Facilities and Depreciation - Facilities are stated at their original cost when acquired. Depreciation for financial accounting purposes is generally provided by accelerated methods over the estimated useful lives of the facilities ranging from 10 to 48 years for buildings and 3 to 15 years for equipment. Leasehold improvements are amortized on a straight-line basis over the estimated useful life or the lease term, whichever is less. Depreciation and amortization for tax reporting is provided over the shortest allowable lives.

Engineering Expense - Expenditures for research, development and engineering of products and manufacturing processes are expensed as incurred.

Pension Expense - Pension expense is funded as accrued, including amortization of past service cost by the declining balance method over 20 years.

Income Taxes-Investment tax credits reduce income taxes in the year the related facility is placed in service. Tax deferral resulting from Domestic International Sales Corporation subsidiaries is recognized in the provision for income taxes and included in the deferred tax liability.

Per Share Amounts- The earnings per share are based on the weighted average number of shares outstanding during the fiscal year.

Fiscal Year- The Company's fiscal year is the 52 or 53 weeks ending the last Saturday in May. The 52 week years are comprised of 13 four-week accounting periods separated into two 12-week quarters ending during August and November, a 16-week quarter ending during March, and a 12-week quarter ending during May. A 53-week year results in a five-week accounting and a 12-week quarter at the beginning of the fiscal year. 1980 was a 53 week fiscal year.

Rounding-All financial amounts, except per share, are rounded to the nearest one thousand dollars in the financial statements and tables to the notes.

The Company adopted the Financial Accounting Standard 52 method of accounting for the effects of foreign currencies in 1983 In applying this method, an adjustment of $12,359,000 was made to shareowners' equity, of which $4,542,000 relates to beginning of year adjustments. This adjustment recognizes the negative impact of changing exchange rates in the translation to UnitPd Stt1lt'S dollars of those foreign subsidiaries that function in their local currency. Included in non-operating income is an additional $"3 ,0"35,000 loss on currencies made up of a $1,248,000 loss from translating the financial statements of foreign subsidiaries where th e? fun c.. t1011;il currency is the United States dollar, $4,072,000 loss from translating non-local currency obligations, and a gain of $2,285,000 lrorn the actual exchange of currencies. The Company did not apply this change in accounting to prior years. lht.> C.ompany and its joint venture affiliates operate predominantly in a single industry segment: The design, manufacture, sale and ~<1rv1ce of electronic measurement, display and control instruments and systems used in science, industry and education. Geographically the Company operates primarily in the industrialized world. Sales, income and assets in the United States, Europe and other geographic areas were: 1979 1980 1981 1982 1983 $487,172 $591,760 $ 625,335 $ 729,369 $ 734,223 U.S. sales to customers 47,167 57,805 71,714 89,212 89,941 U.S. export sales to customers 147,414 185,772 219,976 237,339 228,393 U.S. transfers to affiliates 681,753 835,337 917,025 1,055,920 1,052,557 U.S. sales 225,388 288,630 322,900 328,469 324,273 European sales to customers 1,665 577 2,665 25,756 18,650 European transfers to affiliates 227,053 289,207 325,565 354,225 342,923 European sales 27,209 33,111 4 1,885 48,699 42,943 Other area sales to customers (149,079) (186,349) (222,641) (263,096) (247,043) Inter-area eliminations $786,936 $971,306 $1,061,834 $1,195,748 $1,191,380 Net sales

$102,702 $123,170 $ 118,688 $ 121,547 $ 85,151 U.S. operating income 28,506 34,002 30,132 31,363 36,233 European operating income 1,418 2,139 3,768 4,186 3,829 Other area operating income (6,025) (5,529) (8,41 2) (2,937) (1,461) Inter-area eliminations 126,601 153,782 144,176 154,159 123,752 Area operating income (S, 153) (5,933) (6,140) (7,712) (9,297) General corporate expense (6,428) (15,956) (25,274) (29,537) (25,832) Interest expense 11,631 5,029 19,630 9,493 (25,509) Non-operating income $126,651 $136,922 $ 132,392 $ 126,403 $ 63, 11 4 Income before taxes

$464,330 $607,686 $ 680,138 $ 748,140 $ 783,598 U.S. assets 120,525 156,444 198,702 192,785 184,137 European assets 11,554 13,203 16,383 18,042 14,664 Other area assets (8,571) (11,027) (14,395) (15,992) (16,630) Inter-area eliminations 587,838 766,306 880,828 942,975 965,769 Area assets 17,030 19,759 27,011 29,377 31,585 Joint venture equity 38,039 55,628 45,914 69,935 90,060 Corporate cash earning income $642,907 $841,693 $ 953,753 $1,042,287 $1,087,414 Assets at year-end

Transfers of products and services are made at arms-length prices between geographic areas. The profit on transfers between geographic areas is not recognized by the manufacturer until sales are made to unaffiliated customers. Area operating income includes all directly incurred and allocable costs, except identified corporate expenses. Identifiable assets are those which are specifically associated with the operations of each geographic area. Net sales to United States or foreign government agencies were not more than ten percent of consolidated net sales in any of the past five years, and no other customer accounted for more than four percent of sales.

The Company has 18 foreign operating subsidiaries located in Australia, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Guernsey, Italy, The Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom w ith a branch in Ireland. The assets, liabilities, sales and income of foreign subsidiaries are include in the consolidated financial statements in these amounts: 1979 1980 1981 1982 1983 $141,446 $169,051 $208,864 $218,375 $233,030 Current assets 39,090 55,483 68,207 68,548 69,334 Current liabilities 18,585 22,185 28,938 34,787 29,727 Facilities less depreciation 1, 118 907 410 603 95 Other assets 6,732 7,857 8,228 9,449 7,598 Other liabilities

$252,597 $321,741 $364,785 $377,167 $367,215 Net sales 77,878 97,367 105,403 109,479 106,268 Gross income 29,941 37,446 34,285 30,808 34,760 Operating income 31,809 39,781 33,301 31,948 34,916 Income before taxes 22,853 29,882 19,401 21,048 21,787 Earnings The Company has investments in three joint venture companies in Austria, Japan and Mexico. The Company's share of the assets, liabilities, sales and income of these unconsolidated affiliates consisted of: 1979 1980 1981 1982 1983 $ 21,713 $ 24,873 $ 32,173 $ 33,429 $ 31,166 Current assets 10,936 12,903 16,892 16,166 15,149 Current liabilities 3,939 5,477 8,686 9,114 13,023 Facilities less depreciation 3,202 3,063 4,236 3,895 4,213 Other assets 1,145 1,558 1,417 1,237 1,560 Other liabilities

$ 40,551 $ 46,064 $ 59,660 $ 61,520 $ 57,368 Net sales 16,740 16,107 23,728 21,613 18,668 Gross income 10,385 8,859 14,181 11,161 7,761 Operating income 10,618 8,041 15,575 10,419 7,966 Income before taxes 5,222 2,930 7,597 4,023 3,636 Earnings The Company had arms-length sales to, purchases from, and accounts receivable due from joint venture companies amounting to: 1979 1980 1981 1982 1983 $ 34,904 $ 44,764 $ 54,130 $ 59,244 $ 56,136 Sales to 6,106 8,628 10,954 10,665 9,288 Purchases from 6,458 8,487 10,143 11,803 9,840 Accounts receivable There are no significant restrictions which prevent dividends to the parent company from subsidiary or joint venture companies.

The accounts receivable have been reduced by an allowance for doubtful accounts which was $1,752,000 in 1979, $2,022,000 in 1980, $2,177,000 in 1981, $2,186,000 in 1982, and $2,092,000 in 1983. The net charges to this reserve for uncollected credit sales were not material.

The inventories valued on a first-in, first-out basis (FIFO) approximate current cost. These inventories, less the reserve for inventories adjusted to the last-in, first-out basis (LIFO), consisted of: 1979 1980 1981 1982 1983 $ 43,989 $ 62,197 $ 57,698 $ 42,895 $ 49,290 Purchased materials 128,926 169,706 196,925 220,735 229,747 Work-in-process 66,567 81,388 115,181 130,221 126,470 Finished goods 239,482 313,291 369,804 393,851 405,507 Inventories at FIFO (24,949) (49,728) (76,099) (103,583) (112,622) LIFO reserve $214,533 $263,563 $293,705 $290,268 $292,885 Inventories

The original cost of facilities, additions and disposals consisted of: 1979 1980 1981 1982 1983 $ 6,511 $ 8,240 $ 15,524 $ 27,656 $ 28,251 Land at prior year-end 1,880 7,360 12,668 1,200 1,698 Additions (151) (76) (536) (605) (382) Dispositions 8,240 15,524 27,656 28,251 29,567 Land at year-end 83,598 102,976 163,598 195,132 211,945 Buildings at prior year-end 20,460 61,057 34,935 17,790 20,195 Additions (1,082) (435) (3,401) (977) (3,851) Dispositions 102,976 163,598 195,132 211,945 228,289 Buildings at year-end 102,122 142,257 193,514 254,126 322,282 Equipment at prior year-end 48,513 59,342 69,119 82,194 82,828 Additions (8,378) (8,085) (8,507) (14,038) (13,315) Dispositions 142,257 193,514 254,126 322,282 391,795 Equipment at year-end 12,462 41,958 30,125 27,468 28,694 Construction at prior year-end 29,496 (11,833) (2,657) 1,226 (11,396) Net changes 41,958 30,125 27,468 28,694 17,298 Construction at year-end $295,431 $402,761 $504,382 $591,172 $666,949 Facilities I ll11 ,1Ccumulated depreciation, depreciation expense and depreciation related to disposals consisted of: 1979 1980 1981 1982 1983 $ 28.887 $ 32,33 1 $ 37,462 $ 44,736 $ 53,769 For buildings at prior year-end 3,648 5,346 7,535 9,317 9,915 Depreciation expense (204) (215) (261) (284) (1,138) Depreciation related to dispositions 32,331 37,462 44,736 53,769 62,546 For buildings at year-end 56,273 68,646 88,528 11 8,734 158,281 For equipment at prior year-end 17,610 24,957 34,693 47,156 56,795 Depreciation expense (5,237) (5,075) (4,487) (7,609) (7,963) Depreciation related to dispositions 68,646 88,528 118,734 158,281 207, 113 For equipment at year-end $100,977 $125,990 $163,470 $212,050 $269,659 Accumulated depreciation

The other long-term assets consisted of: 1979 1980 1981 1982 1983 $17,030 $19,759 $27,011 $29,377 $31,585 Investments in joint-venture companies 1,118 1,661 1,993 3,506 2,498 Long-term contracts receivable 10,008 Deferred profit sharing 1,518 2,585 10,046 8,301 6,353 Goodwill and other intangibles $19,666 $24,005 $39,050 $41,184 $50,444 Other assets

The Company has lines of credit with United States and foreign banks which aggregated $1 12 million at May 28, 1983, of which approximately $81 million was unused. The charges are not significant for those lines that are fee compensated. A summary of short- term borrowings was: 1979 1980 1981 1982 1983 Bank borrowings at year-end: $17,900 $17,457 $29,458 $30,640 $30,714 Outstanding 11.1 % 16.2% 17.1% 16.0% 13.9% Average interest rate At accounting period-end: $13,072 $17,541 $23,144 $29,855 $30,080 Average outstanding 10.0% 13.0% 15.7% 15.5% 15.1% Average interest rate $20,415 $24,981 $31,224 $45,312 $38,320 Maximum outstanding Commercial paper borrowings at year-end: $10,000 $27,700 Outstanding 10.0% 11.4% Average interest rate At accounting period-end: $ 714 $49,763 Average outstanding 10.0% 15.2% Average interest rate $10,000 $83,100 Maximum outstanding

The long-term indebtedness consisted of: 1979 1980 1981 1982 1983 $ 31,000 $ 51,900 $ 74,500 Commercial paper borrowings $ 75,000 75,000 75,000 75,000 11% Notes due July 15, 1990 $35,000 35,000 35,000 35,000 87/s¾ Notes due May 15, 1983 20,000 20,000 20,000 9½% Note due November 15, 1981 8,191 6,848 5,860 5,854 5,803 Other borrowings 63,191 136,848 166,860 167,754 155,303 Long-term borrowings (1,097) (652) (20,7 17) (35,694) (2,961) Current maturities $62,094 $136,196 $146,143 $132,060 $152,342 Long-term debt

The commercial paper borrowings, with a weighted average interest rate of 8.6% at year-end, have been supported by revolving credit commitments since 1981. These commitments aggregated $1 15 million at May 28, 1983, and are convertible to four-year term loans in 1985. The Company intends to replace these commercial paper borrowings at some future time with long-term financing. The 11% Notes may be redeemed at anytime at the option of the Company on or after July 15, 1986, at the principal amount together with accrued interest. Aggregate long-term debt and early retirement principal payments for each of the next five years will be $7,144,000 1n 1984, $8,324,000 in 1985, $26,761,000 in 1986, $29,043,000 in 1987, and $20,795,000 in 1988.

The Company is committed under operating leases for buildings and equipment in the aggregate amount of $41,339,000; payable $11,349,000 in 1984, $8,018,000 in 1985, $5,697,000 in 1986, $3,423,000 in 1987, $2,441,000 in 1988, and $10,411,000 thereafter. The cost to complete facilities projects authorized at May 28, 1983 is approximately $58 million.

The United States Government claims additional discounts for purchases of the Company's products under General Services Administration supply contracts for the three years ending in 1980. The Company believes that these claims will be resolved in a manner that will not have a material effect on its results of operations or financial position.

A summary of selected expense categories is: 1979 1980 1981 1982 1983 $10,416 $12,393 $14,169 $15,166 $16,432 Advertising expense 22,454 31,477 36,433 38,006 38,881 Maintenance and repair expense 8,199 12,322 16,179 17,582 16,294 Rental expense

The parent company and a domestic subsidiary have defined benefit pension plans which are integrated with social security and cover all United States employees. The weighted average assumed rate of return used in determining the actuarial present value of accumulated plan benefits is 7.5%. The actuarial present value of accumulated plan benefits, the plan net assets available for benefits and pension expenses were: 1979 1980 1981 1982 1983 $39,577 $48,788 $103,961 Vested benefits 11,864 13,725 12,875 Non-vested benefits $51,441 $62,513 $116,836 Plan benefit value $30,079 $42,145 $60,205 $78,262 $143,011 Plan net assets available for benefits 8,475 9,406 12,172 14,857 48,248 Pension expenses Included in 1983 pension expense is $30,500,000 providing a pension supplement for employees who accepted a one-time early retirement opportunity which reduced earnings $11,100,000 ($.59 per share). This obligation accrues interest at 10. 75% and the long­ term unfunded portion of this expense, $26,318,000, is included in other liabilities. Foreign subsidiaries provide for employee retirement in keeping with the practices and laws of the countries in which they operate. Foreign plans are not considered to be material and are not required to report to United States government agencies. Foreign subsidiary pension expenses were $1,924,000 in 1979, $2,360,000 in 1980, $2,733,000 in 1981, $2,900,000 in 1982, and $3,116,000 in 1983. Amounts owing under pension and incentive plans, included in accrued compensation, were $31,691,000 in 1979, $33,964,000 in 1980, $33,870,000 in 1981, $31,078,000 in 1982, and $24,303,000 in 1983.

As a part of compensation, most employees receive cash and deferred profit share amounting to 27.5% of income of participating companies before profit sharing, incentive compensation, charitable contributions and income taxes. Additional profit share of 7.5% is contributed to a retirement trust for parent company employees. The Company has incentive compensation plans for executives. The plans provide for compensation based on financial performance over a three-year period. Provision for this expense is included in profit sharing. The Company has stock option plans for selected employees. At May 28, 1983, 1,044,984 common shares were reserved for issuance under these plans. There were 527,013 shares subject to outstanding options, of which 227,181 were exercisable. The outstanding options are held by 536 participants, are exercisable at prices from $12.13 to $65.50, and expire between August 29, 1984and May 3, 1993. There is no material potential dilution to earnings per share from unexercised stock options. The options that have been exercised under these and prior plans are: 1979 1980 1981 1982 1983 110,417 64,750 33,294 6,740 38,321 Number of shares $ 1,855 $ 1,022 $ 757 $ 108 $ 2,039 Option value The stock option plans allow stock appreciation rights to be granted to part[cipants. When granted, all or part of an option may be surrendered for shares or payment in an amount equal to the difference between the option price and the market price of the option right surrendered. Provision for the difference between current market price and option price of outstanding stock appreciation rights is included in profit sharing. Profit sharing expense consisted of: 1979 1980 1981 1982 1983 $48,521 $50,599 $48,166 $45,393 $20,631 Cash and deferred profit share 12, 176 12,668 12,067 11,934 5,092 Retirement profit share 869 181 (218) 189 Incentive compensation provision 2,116 1,671 (2,060) 3,404 Stock appreciation rights provision $63,682 $63,448 $61,686 $55,267 $29,316 Profit sharing Employees of the parent company and a domestic subsidiary are eligible to participate in an Employee Share Purchase Plan in which 4,358 employees were participants, of 17,072 eligible employees, at May 28, 1983. Under the Plan 639,556 common shares of the Company were reserved at May 28, 1983 and 102,876 at May 29, 1982. During 1983, 213,320 shares with a market value of $11,781,000 were issued for $9,425,000, while 226,966 shares with a market value of $11,654,000 were issued for $9,323,000 in 1982. The share purchase discount provided in the plan has been charged to non-operating income.

The non-operating sources of income and expense which comprise non-operating income consisted of: 1979 1980 1981 1982 1983 $ 3,448 $ 4,593 $ 8,183 $10,447 $ 8,965 Investment income 5,222 2,930 7,597 4,023 3,636 Equity in joint venture earnings 435 1,729 (3,309) (2,679) (3,035) Currency gains (losses) (1,981) (4,223) (3,379) (2,298) (4,575) Other income (expense)-net 4,507 10,538 (30,500) Non-recurring income (expense) $11,631 $ 5,029 $19,630 $ 9,493 $(25,509) Non-operating income (expense) The non-recurring income is the satisfaction of a patent infringement judgment in 1979, and the sale of the Company's patient monitoring business in 1981. The non-recurring expense is the actuarial cost of an early retirement program in 1983.

The provision for income taxes consisted of: 1979 1980 1981 1982 1983 $33,422 $34,468 $31,225 $28,950 $ (1,772) United States 7,122 7,483 7,100 7,100 3,043 State 8,956 9,899 13,900 10,900 13,129 Foreign 49,500 51,850 52,225 46,950 14,400 Income taxes provided (1,040) (3,946) (4,386) (4,444) (3,122) Undistributed subsidiary earnings (4,667} (4,808) Depreciation timing differences 8,721 Early retirement program (2,081) (878) (2,405) (1,248) (3,358) Other tax deferrals (3, 121) (4,824) (6,791) (10,359) (2,567) Income taxes deferred 12,250 Prepaid for inventory obsolescence $46,379 $47,026 $45,434 $36,591 $24,083 Income taxes currently payable The above provisions were less than the amounts which would result by applying the United States statutory rate to income before income taxes. A reconciliation of the difference was: 1979 1980 1981 1982 1983 $59,779 $62,984 $60,901 $58,145 $29,032 Income taxes based on U.S. statutory rate (3,821) (3,618) U.S. research and experimentation tax credits (3,786) (5,296) (5,258) (6,041) (6,517) U.S. investment tax credits (1,903) (556) (2,204) 2,054 1,094 Other U.S. adjustments 3,754 4,052 3,833 3,829 1,643 State income taxes, net of U.S. tax (5,879) (7,986) (1,552) (5,365) (5,561) Effect of foreign subsidiaries taxed below U.S. rate (2,465) (1,348) (3,495) (1,851) (1,673) Effect of after tax joint venture earnings $49,500 $51,850 $52,225 $46,950 $14,400 Income taxes Undistributed reinvested earnings of foreign subsidiaries and Domestic International Sales Corforations amounted to approximately $292 million at May 28, 1983. Except for accumulated deferred income tax provisions o $35 million, primarily for Domestic International Sales Corporations, relating to approximately $99 million of such reinvested earnings, no provision has been made for additional United States income taxes which could result from the transfer of undistributed reinvested earnings to the parent company. If the undistributed reinvested earnings were to be transferred, foreign tax credits would be available to partially offset the amount of United States income taxes otherwise payable. The Company has no present intention of transferring such earnings. Equity in the reinvested earnings of joint venture companies amounted to approximately $32 million at May 28, 1983. No provision has been made for United States income taxes which could result from the transfer of such earnings because foreign tax credits would be available to offset the amount of United States income taxes otherwise payable.

The effects of inflation are not apparent in traditional financial statements which are based on historical cost. The Company has attempted to identify the financial effects of changing prices using the current cost method which is dependent upon estimates, approximations and assumptions. In as much as a significant part of the Company's operations are now measured in functional currencies other than the U.S. dollar, the data which follows has been revised from that reported in previous years to reflect the eliminations of certain constant dollar information and the change in method of translating foreign currency financial statements. The current cost method measures changes in specific prices for the inventories and facilities used in the Company's operations, using appropriate price indexes. The effect of general inflation on the current cost information is based on the U.S. Consumer Price Index for All Urban Consumers and is measured after translation of foreign currency financial statements. Adjustments to the historical cost statements are necessary to restate financial information under the current cost method. Cost of sales is revised to reflect changes in inventory prices for foreign inventories which are not on the last-in, first-out (LIFO) basis. No adjustment is required for United States inventories which are valued on the LIFO basis, because historical cost of sales approximates current cost. Depreciation expense is adjusted to reflect increased costs to construct facilities at current prices. This revision is based on the same depreciation methods, useful lives and salvage values as used in the historical cost statements. Income taxes are not adjusted because current tax laws do not recognize the effects of inflation. Inflation also causes gains or losses in the purchasing power of monetary items which are money or a claim to receive or pay money in an amount which is presently fixed or determinable. Since the Company owes more to its creditors than it holds in cash and has due from customers, a future gain occurs as these creditors are paid with money that has declined in purchasing power as measured in inflated dollars. This selected financial information, stated in average 1983 dollars, has been adjusted for the effects of changing prices: 1979 1980 1981 1982 1983 $1,134,510 $1,238,994 $1,209,782 $1,251,589 $1,191,380 Net sales 108,520 91,338 83,163 48,714 Earnings Adjustments for: (3,913) (2,908) (1,554) 1,358 Cost of sales before depreciation (11,953) (10,414) (10,608) (10,960) Depreciation expense $ 92,654 $ 78,016 $ 71,001 $ 39,112 Earnings adjusted for specific prices $ 748,045 $ 800,729 $ 870,186 $ 887,034 Shareowners' equity (6,647) Aggregate currency adjustment 6,872 9,185 6,200 1,972 Gain from ·decline 1n purchasing power 33,424 22,316 (1,704) 11,687 Excess of the increase of general inflation over specific prices for inventories and facilities 5.08 4.23 3.80 2.07 Earnings per share .68 1.00 1.03 1.03 1.00 Dividends per share 67.45 59.60 66.26 53.78 73.08 Share price at year-end 203.5 230.0 257.5 280.3 293.4 Average consumer price index At May 28, 1983, the current cost of inventories was $399,895,000, and facilities was $494,805,000. The 1983 increase in specific prices for inventories and facilities aggregated, in average 1983 dollars, $19,534,000 which is $11,687,000 less than the increase attributable to general inflation. The difference results because the costs of materials and components used in the design and manufacture of the Company's products have not increased as much as general price levels.

In the opinion of management, this unaudited quarterly financial summary includes all adjustments necessary to present fairly the resu Its for the periods represented: 12\Ye

The Company's common shares are traded on the New York and Pacific Stock Exchanbes. There were 6,444 share owners of record at August 1, 1983. The market price range and close are the composite prices reported y The Wall Street Journal rounded to full cents per share: 1979 1980 1981 1982 1983 First fiscal quarter: $46.88 $59.50 $70.25 $61.50 $54.38 Highest trade 40.00 48.63 47.50 47.25 34.00 Lowest trade 46.00 57.25 67.63 47.38 37.00 Closing share price Second fiscal quarter: 50.50 61.50 69.88 54.75 54.00 Highest trade 39.00 53.25 59.25 45.13 36.75 Lowest trade 43.25 59.00 65.50 53.00 50.75 Closing share price Third fiscal quarter: 54.00 64.25 68.50 56.00 75.75 Highest trade 41.50 51.00 50.50 45.00 48.50 Lowest trade 51.38 51.13 52.63 45.00 75.00 Closing share price Fourth fiscal quarter: 57.00 52.00 63.25 56.25 76.50 Highest trade 46.88 4 1.63 51.75 42.38 61.00 Lowest trade 49.25 49.75 60.75 52.63 74.00 Closing share price

Dividends are paid at the discretion of the Board of Directors dependent upon their judgment of future earnings, capital expenditures and financial condition. 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 21.38 18.69 30.13 33.88 40.50 49.25 49.75 60.75 52.63 74.00 SHARE PRICE AT YEAR-END 24.8% - 12.6% 61.2% 12.4% 19.5% 21.6% 1.0% 22.1% - 13.4% 40.6% Market appreciation .6% .5% .6% .7% 1.4% 1.5% 1.6% 1.8% 1.6% 1.9% Dividend yield

12.9 % 13.9% 13.9% 17.4% 18.9% 21.2% 19.2% 15.4 % 13.4 % 7.5% RETURN ON EQUITY 7.9% 7.8% 8.2% 9.7% 9.5% 9.8% 8.8% 7.5% 6.6% 4.1 % Earnings margin 1.67x 1.78x 1.69x 1.80x 1.99x 2.16x 2.19x 2.04x 2 01x 1.84x Equity turnover

11.9% 12.6% 12.3% 1S.4% 16.9 % 18.4% 15.8% 12.7% 11 .6 % 7.4 % RETURN ON CAPITAL 8.0% 8.3% 8.7% 10.0% 9.8% 10.1% 9.4% 8.5% 7.7% 5.2% Preinterest margin 1.50x 1.52x 1.4 lx 1.53x 1.73x 1.81x 1.68x 1.50x 1.51x 1.42x Capital turnover

297,000 329,000 376,000 S13,000 650,000 847,000 1,049,000 1,040,000 1,221,000 1,124,000 CUSTOMER ORDERS 28.0% 10.8% 14.3% 36.4% 26.7% 30.3% 23.8% - .9% 17.4% -7.9% Increase 24.9% 18.5% 18.6% 25.0% 27.5% 28.2% 30.2% 28.4% 26.3% 22.5% Orders unfilled at year-end

271,428 336,645 366,64S 454,958 598,886 786,936 971,306 1,061 ,834 1,195,748 1,191,380 NET SALES 33.8% 24.0% 8.9% 24.1% 31.6% 31.4% 23.4% 9.3% 12.6% - .4% Increase 49.9% 51 .4% 53.8% 56.9% 55.5% 54.3% 52.8% 51.7% 50.2% 48.3% Gross income margin 14.2% 15.1% 15.8% 16.8% 15.7% 15.4% 15.2% 13.0% 12.2% 9.6% Operating income margin 14.2% 13.9% 15.1% 16.6% 16.0% 16.1% 14.1% 12.5% 10.6% 5.3% Pretax income margin 44.5% 43.8% 45.5% 41.9% 40.8% 39.1% 37.9% 39.4% 37.1% 22.8% Income tax rate

21 ,353 26,329 30,089 43,971 56,846 77,151 85,072 80,167 79,453 48,714 EARNINGS 27.6% 23.3% 14.3% 46.1% 29.3% 35.7% 10.3% - 5.8% - 0.9% - 38.7% Increase 1.23 1.52 1.71 2.49 3.19 4.28 4.66 4.34 4.25 2.57 Earnings per share .10 .10 12 .225 .48 .60 .79 .90 .98 1.00 Dividends per share

251,061 306,616 344,860 415,328 491,130 642,907 841 ,693 953,753 1,042,287 1,087,414 TOTAL ASSETS

1.20x 1.21 X 1.13x 1.20x 1.32x 1.39x 1.31 x 1.18x 1.20x 1.12x Asset turnover 5.50x 5.78x 5.58x 5.78x 5.92x 5.86x 5.52x 5.27x 5.49x 5.40x Receivable turnover 3.27x 3.30x 3.52x 4.18x 4.25x 4.16x 4.06x 3.81x 4.10x 4.09x Inventory turnover 5.10x 4.68x 4.28x 4.95x 5.57x 5.01x 4.12x 3.44x 3.32x 3.07x Facility turnover

199,461 244,906 273,659 319,287 374,133 493,891 665,343 753,862 828,843 847,712 INVESTED CAPITAL 11.7% 5.2% 1.1% 1.7% 2.8% 5.9% 6.9% 6.7% 8.0% 4.0% Short-term debt .3% 12.2% 14.1% 12.5% 9.9% 12.6% 20.5% 19.4% 15.9% 18.0% Long-term debt 88.0% 82.6% 84.8% 85.8% 87.3% 81.5% 72.6% 73.9% 76.1% 78.0% Shareowners' equity

12,693 12,664 12,970 14,637 19,147 21,291 23,890 24,028 23,231 21,078 Employees 2,940 3,420 3,705 3,906 3,987 4,935 5,921 7,300 7,486 7,785 Square feet in use

Returns, ratios and turnovers are based on average assets and capital. Amounts are in thousands except per share and employees.